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Javier E

The parable of Boris Johnson | The Economist - 0 views

  • In the coming days or weeks, he may be kicked out of office by his own MPs. More likely, he will cling on in 10 Downing Street under the permanent threat of eviction. Either way, he no longer controls the fate of his own premiership.
  • Downing Street indulged in routine late-night booze-ups while the rest of the country was under strict lockdown. The prime minister’s disingenuous attempts to wriggle out of being blamed did him no good—indeed, they served only to reveal his and his wife’s own carousing.
  • Double standards at the top tend to corrupt the whole of public life. More important, it raises two other of Mr Johnson’s attributes that plague post-Brexit Britain.
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  • The first is Mr Johnson’s childish lack of seriousness about the business of government. Downing Street’s fightback this week, supposedly under the title “Operation Red Meat”, launched a fusillade of Tory-pleasing pledges to abolish the BBC licence fee and stop asylum-seekers from reaching Britain across the English Channel.
  • The government says it will get the Royal Navy to police the seas and send applicants away, reportedly to be processed in Ghana or Rwanda. None of that bluster survived the briefest encounter with reality.
  • This lack of seriousness has infected the government.
  • This week the Tories took credit for the fact that Britain has the fastest annual growth rate in the G7 and that output regained its pre-pandemic level in November, ahead of forecasts. But they have not grappled with Brexit’s probable long-term hit to productivity, of about 4%.
  • Over five years, Britain’s growth rate has been poor. Inflation, which reached 5.4% in the 12 months to December, a 30-year high, means real average weekly pay is less than in 2007. Business investment is lower than before the referendum.
  • unveiled plenty of big economy-boosting ideas, including levelling up prosperity across Britain, tearing down planning restrictions and making Britain a science superpower.
  • The big ideas are either still slogans or have been quietly abandoned
  • At the same time, the Tories have pressed ahead with crowd-pleasing, illiberal bills that trample civil liberties and restrict the rights of new citizens. It is a mark of Mr Johnson’s unseriousness that he tosses aside his vaunted classical liberal beliefs as carelessly as an empty bottle.
  • To get Brexit done, Mr Johnson agreed on a customs border in the Irish Sea and then proceeded to pretend he hadn’t.
  • He argued that Britain would escape the regulatory straitjacket of the European Union, but he has avoided doing much deregulating—which, however swashbuckling it sounds in a headline, tends in real life to be unpopular.
  • To prosper, Britain needs decent relations with the EU, its closest neighbour and biggest trading partner. But Mr Johnson relishes picking fights instead, because he likes to play to the gallery.
  • Mr Johnson has crumbled because he repeatedly failed to tell the truth to Parliament and the nation about Downing Street’s bacchanals.
  • First he declared that his staff did not hold parties. When that was disproved, he denied knowing about them. When it emerged that he had been at one, he said he had not realised they counted as parties. And when it was claimed that he had been warned they did, he seemed to suggest that he misunderstood the rules his own government had drafted. It is a pattern that stretches back to his time as a journalist, when he lied to his editors; to when he was an editor, when he lied to his proprietor; and to when he was a shadow minister, when he lied to his party’s leader.
  • almost half of Conservative Party members still believe that Mr Johnson’s account of Number 10’s revels is true, compared with just 13% of all voters in a poll published a few days earlier.
  • the excesses of Partygate have shown that the post-Brexit Tory party has lost touch with reality.
  • It is a strength of the parliamentary system that MPs can bring about a rapid change of direction. If the Conservative Party is to find its way, it will need a new leader. If reforms are to take root, they will need detailed planning and sustained application.
Javier E

Niall Ferguson: Ukraine Invasion Struggles Could Be the End for Putin - Bloomberg - 0 views

  • What makes history so hard to predict — the reason there is no neat “cycle” of history enabling us to prophesy the future — is that most disasters come out of left field.
  • Unlike hurricanes and auto accidents, to which we can at least attach probabilities, the biggest disasters (pandemics and wars) follow power-law or random distributions. They belong in the realm of uncertainty, or what Nassim Nicholas Taleb, in his book “The Black Swan,” calls  “Extremistan.”
  • What’s more, as I argued in my book “Doom,” disasters don’t come in any predictable sequence.
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  • Ukraine is also receiving vital private-sector assistance, notably the delivery of Starlink internet terminals, which are helping maintain communications
  • All I can do is to apply history, as there is no model from political science or economics that can really help us here.
  • 1. Do the Russians manage to take Kyiv in a matter of two, three, four weeks or never?
  • At least one military analyst I respect said late last week that the Russian invasion force has around two weeks left before serious logistical and supply problems force Putin seriously to the negotiating table.
  • On the other hand, Western media seem over-eager to cover news of Russian reverses, and insufficiently attentive to the harsh fact that the invaders continue to advance on more than one front.
  • A better analogy than the Winter War with Finland may be the Soviet invasion of Afghanistan that began in December 1979.
  • Economic warfare between 1914 and 1918 was not a substitute for sending British armies to fight on the European continent, just as it had not been in the Napoleonic Wars against France.
  • What I cannot tell is whether or not these weapons and other equipment will suffice to sustain Ukrainian resistance over the coming weeks.
  • But the Ukrainians have no real answers to higher-altitude bombardment and missile attacks.
  • 2. Do the sanctions precipitate such a severe economic contraction in Russia that Putin cannot achieve victory?
  • I have heard it said that the breadth and depth of the sanctions imposed on Russia make them unprecedented. I disagree
  • recalls but does not quite match the sanctions that Britain and its allies imposed on Germany at the outbreak of World War
  • It seems there are seven distinct historical processes at work and it’s not clear which is going fastest.
  • Then, as now, it was possible for an increasingly authoritarian government to impose economic controls and divert resources away from civilian consumption to the war effort, while blaming the resulting deprivation on the enemy
  • We should remember that those measures did not defeat Germany, however, because — like Russia today — it had the resources to be self-sufficient
  • no one should forget that self-sufficiency is possible for Russia, albeit at the price of severe austerity, whether it is a choice or a consequence of war.
  • China is able to help Russia in ways that could mitigate the economic shock, just as for years it has helped Iran to circumvent U.S. sanctions by buying its oil.
  • Unlike Soviet citizens, who were accustomed to a state monopoly on communications, today’s Russians have come to rely as much as we do on Big Tech. Being cut off from the metaverse may prove a more psychologically painful deprivation than shortages of imported foods.
  • even a 35% quarterly decline in gross domestic product does not condemn a country to military defeat if its planes can still fly and its tanks still fire rounds.
  • 3. Does the combination of military and economic crisis precipitate a palace coup against Putin?
  • 4. Does the risk of downfall lead Putin to desperate measures (carrying out his nuclear threat)? 
  • The people with the power to arrest Putin are the people he counts on to execute his arrest orders: Nikolai Patrushev, the head of the Security Council and, like Putin, a long-serving KGB officer; Sergei Naryshkin, the head of foreign intelligence; and Alexander Bortnikov, who heads the Federal Security Service, the successor to the KGB.
  • 6. Does the West’s attention deficit disorder kick in before any of this?
  • If Putin’s goal was to deter members of NATO from offering direct military assistance to Ukraine, it seemed to have some effect.
  • Russian casualties are being caused by Ukrainians using arms supplied by multiple NATO countries, including the U.S. and Turkey, but they are mostly crossing into Ukraine from Poland. Might Putin therefore strike a target in eastern Poland — Lublin, say, or Przemysl?
  • he is surely more likely to do so if believes the U.S. would not immediately retaliate in kind against a Russian target. A key lesson of this entire crisis has been that indications of weakness on the U.S. side, which I discussed here last week, have emboldened Putin.
  • 5. Do the Chinese keep Putin afloat but on the condition that he agrees to a compromise peace that they offer to broker?
  • My guess is that the Chinese make no serious diplomatic move until they are convinced Putin’s invasion is thoroughly bogged down in Ukraine’s spring mud.
  • I would not bet the fate of Ukraine on Russian internal politics.
  • Remarkably, one U.S. legislator told me last week that he “couldn’t recall an issue more obsessively followed and more unifying among” his constituents.
  • The only real significance of Western public outrage at Putin’s actions is the political pressure it exerts on Biden and other leaders to take a tougher line with Russia.
  • 7. What is the collateral damage?
  • History shows that wars (much more than pandemics) are the most common cause of jumps in inflation.
  • The best-known recent illustration is the way wars in 1973 (Yom Kippur) and 1979 (Iran-Iraq) contributed to the great inflation of the Seventies
  • these price spikes are not confined to oil and gas but involve a host of other commodities. The prospect of this year’s Ukrainian grain harvest being disrupted means a significant surge in food prices, with all kinds of consequences, especially in developing countries.
  • A tsunami of war has struck Ukraine. Whether the Russian tide flows or ebbs in the coming weeks will do much to determine the course of world history for the rest of our lives.
  • Nor can we ignore the risks that may be lurking within the international financial system.
  • This is the first big crisis of Cold War II, which is in many ways like a mirror image of Cold War I, with China the senior partner, Russia the junior, and a hot war in Eastern Europe rather than East Asia (it was Korea’s turn in 1950).
  • I do not know how the crisis will turn out, but I do know it will have profound consequences for the course of the superpower contest.
  • If the invasion of Ukraine ends in disaster for the heroic defenders of Kyiv and their comrades, another disaster may well follow — and it could occur as far away as Taiwan. Conversely, if there is justice in the world and the disaster befalls the architect of this war, that too will give birth to some fresh and unforeseeable event.
  • Add these seven imponderables together and you see how profoundly important the next few weeks will be.
  • The failure of the administration to signal that it would retaliate is of a piece with last year’s reports that Biden’s national security team was considering ruling out first use of nuclear weapons in its new national military strategy. Nuclear missiles cease to be a deterrent if one side is unwilling to use them.
  • Today, however, the boot is on the other foot. Not only is Putin intimidating NATO; he may have achieved something more, namely a tacit admission by the Biden administration that it would not necessarily retaliate with nuclear weapons if Russia used them.
Javier E

Quantum Computing Advance Begins New Era, IBM Says - The New York Times - 0 views

  • While researchers at Google in 2019 claimed that they had achieved “quantum supremacy” — a task performed much more quickly on a quantum computer than a conventional one — IBM’s researchers say they have achieved something new and more useful, albeit more modestly named.
  • “We’re entering this phase of quantum computing that I call utility,” said Jay Gambetta, a vice president of IBM Quantum. “The era of utility.”
  • Present-day computers are called digital, or classical, because they deal with bits of information that are either 1 or 0, on or off. A quantum computer performs calculations on quantum bits, or qubits, that capture a more complex state of information. Just as a thought experiment by the physicist Erwin Schrödinger postulated that a cat could be in a quantum state that is both dead and alive, a qubit can be both 1 and 0 simultaneously.
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  • That allows quantum computers to make many calculations in one pass, while digital ones have to perform each calculation separately. By speeding up computation, quantum computers could potentially solve big, complex problems in fields like chemistry and materials science that are out of reach today.
  • When Google researchers made their supremacy claim in 2019, they said their quantum computer performed a calculation in 3 minutes 20 seconds that would take about 10,000 years on a state-of-the-art conventional supercomputer.
  • On the quantum computer, the calculation took less than a thousandth of a second to complete. Each quantum calculation was unreliable — fluctuations of quantum noise inevitably intrude and induce errors — but each calculation was quick, so it could be performed repeatedly.
  • This problem is too complex for a precise answer to be calculated even on the largest, fastest supercomputers.
  • The IBM researchers in the new study performed a different task, one that interests physicists. They used a quantum processor with 127 qubits to simulate the behavior of 127 atom-scale bar magnets — tiny enough to be governed by the spooky rules of quantum mechanics — in a magnetic field. That is a simple system known as the Ising model, which is often used to study magnetism.
  • Indeed, for many of the calculations, additional noise was deliberately added, making the answers even more unreliable. But by varying the amount of noise, the researchers could tease out the specific characteristics of the noise and its effects at each step of the calculation.“We can amplify the noise very precisely, and then we can rerun that same circuit,” said Abhinav Kandala, the manager of quantum capabilities and demonstrations at IBM Quantum and an author of the Nature paper. “And once we have results of these different noise levels, we can extrapolate back to what the result would have been in the absence of noise.”In essence, the researchers were able to subtract the effects of noise from the unreliable quantum calculations, a process they call error mitigation.
  • In the long run, quantum scientists expect that a different approach, error correction, will be able to detect and correct calculation mistakes, and that will open the door for quantum computers to speed ahead for many uses.
  • Although an Ising model with 127 bar magnets is too big, with far too many possible configurations, to fit in a conventional computer, classical algorithms can produce approximate answers, a technique similar to how compression in JPEG images throws away less crucial data to reduce the size of the file while preserving most of the image’s details
  • Certain configurations of the Ising model can be solved exactly, and both the classical and quantum algorithms agreed on the simpler examples. For more complex but solvable instances, the quantum and classical algorithms produced different answers, and it was the quantum one that was correct.
  • Thus, for other cases where the quantum and classical calculations diverged and no exact solutions are known, “there is reason to believe that the quantum result is more accurate,”
  • Mr. Anand is currently trying to add a version of error mitigation for the classical algorithm, and it is possible that could match or surpass the performance of the quantum calculations.
  • Altogether, the computer performed the calculation 600,000 times, converging on an answer for the overall magnetization produced by the 127 bar magnets.
  • Error correction is already used in conventional computers and data transmission to fix garbles. But for quantum computers, error correction is likely years away, requiring better processors able to process many more qubits
  • “This is one of the simplest natural science problems that exists,” Dr. Gambetta said. “So it’s a good one to start with. But now the question is, how do you generalize it and go to more interesting natural science problems?”
  • Those might include figuring out the properties of exotic materials, accelerating drug discovery and modeling fusion reactions.
Javier E

Home Insurance Premiums Rise as Americans Flock to Weather-Worn States - The New York T... - 0 views

  • Home insurance premiums are on the rise, and a key driver for the price increase is climate change. Yet, Americans are moving fastest to Florida, Texas and other states most at risk for climate-related natural disasters, according to a new study from LexisNexis Risk Solutions, a data and analytics provider.
  • Since 2015, the average homeowner has seen the bill for their property coverage grow by roughly 21 percent. But in Florida and Texas, the two states with the highest population gains in 2022, rates have climbed significantly more — 57 percent in Florida and 40 percent in Texas.
  • “The states where climate tends to impact the world more strongly are seeing a bigger jump in population,”
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  • Many new residents cite cost of a living as a key factor behind their moves, but home insurance costs are rising faster there than the national average, meaning homeowners should brace for sticker shock.In Florida, the average home insurance premium in 2019 was $1,988. Today, it’s $2,714 — an increase of $726.
  • The risk is highest in the Sun Belt region, which is experiencing rapid growth, yet Americans are moving directly into areas of danger. Hurricane Ian alone killed more than 150 Floridians, knocked out power for 2.6 million residents and left Florida with a bill of nearly $113 billion in its wake.
  • Those states are also experiencing extreme weather: Hurricanes like Ian, Nicole and Fiona, as well as record heat, ice and snow storms, wrought billions of dollars of destruction in 2022 and killed nearly 500 Americans.
  • California bucked the trend in several ways. Despite being battered by wildfires and extreme storms in recent years, home insurance rates there grew by only 25 percent, below the increase in other coastal states. California lost 343,230 residents, accounting for a 0.3 percent dip, last year.
  • In South Dakota, 8,424 new residents moved into the sparsely populated state in 2022, while insurance costs have jumped 39 percent since 2015. In dry, sunny Arizona, where nearly 71,000 new residents flocked in 2022, costs grew 28 percent
  • Florida grew by more than 318,000 new residents in 2022, accounting for a population increase of 1.9 percent last year — the largest uptick in the nation. Texas, with more than 230,000 new residents, was right on its tails.
Javier E

America Is Growing Apart, Possibly for Good - The Atlantic - 0 views

  • Michael Podhorzer, a longtime political strategist for labor unions and the chair of the Analyst Institute
  • Podhorzer recently laid out a detailed case for thinking of the two blocs as fundamentally different nations uneasily sharing the same geographic space.
  • in truth, we have never been one nation. We are more like a federated republic of two nations: Blue Nation and Red Nation. This is not a metaphor; it is a geographic and historical reality.”
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  • the growing divisions between red and blue states represent a reversion to the lines of separation through much of the nation’s history.
  • “very similar, both geographically and culturally, to the divides between the Union and the Confederacy. And those dividing lines were largely set at the nation’s founding, when slave states and free states forged an uneasy alliance to become ‘one nation.’”
  • he’s warning that the pressure on the country’s fundamental cohesion is likely to continue ratcheting up in the 2020s
  • the “MAGA movement”—as the U.S. equivalent to the authoritarian parties in places such as Hungary and Venezuela. It is a multipronged, fundamentally antidemocratic movement that has built a solidifying base of institutional support through conservative media networks, evangelical churches, wealthy Republican donors, GOP elected officials, paramilitary white-nationalist groups, and a mass public following
  • Virginia has voted like a blue state at the presidential level, and Arizona and Georgia have moved from red to purple. With these three states shifted into those categories, the two “nations” are almost equal in eligible voting-age population, and the blue advantage in GDP roughly doubles, with the blue section contributing 48 percent and the red just 35 percent.)
  • This divergence itself creates enormous strain on the country’s cohesion, but more and more even that looks like only a way station
  • the underlying political question of the 2020s remains whether majority rule—and democracy as we’ve known it—can survive this offensive.
  • Podhorzer defines modern red and blue America as the states in which each party has usually held unified control of the governorship and state legislature in recent years.
  • By that yardstick, there are 25 red states, 17 blue states, and eight purple states
  • the red nation houses slightly more of the country’s eligible voting population (45 percent versus 39 percent), but the blue nation contributes more of the total U.S. gross national product: 46 percent versus 40 percent
  • it is determined to impose its policy and social vision on the entire country—with or without majority support
  • The hardening difference between red and blue, Podhorzer maintains, “empowers” the 10 purple states (if you include Arizona and Georgia) to “decide which of the two superpower nations’ values, Blue or Red, will prevail” in presidential and congressional elections
  • that leaves the country perpetually teetering on a knife’s edge: The combined vote margin for either party across those purple states has been no greater than two percentage points in any of the past three presidential elections
  • That’s a reversal from the middle decades of the 20th century, when the basic trend was toward greater convergence.
  • One element of that convergence came through what legal scholars call the “rights revolution.” That was the succession of actions from Congress and the Supreme Court, mostly beginning in the 1960s, that strengthened the floor of nationwide rights and reduced the ability of states to curtail those rights.
  • Key moments in that revolution included the passage of the Civil Rights and Voting Rights Acts and the Supreme Court decisions striking down state bans on contraception, interracial marriage, abortion, and, much later, prohibitions against same-sex intimate relations and marriage.)
  • Simultaneously, the regional differences were moderated by waves of national investment, including the New Deal spending on rural electrification, the Tennessee Valley Authority, agricultural price supports, and Social Security during the 1930s, and the Great Society programs that provided federal aid for K–12 schools and higher education, as well as Medicare and Medicaid.
  • The impact of these investments (as well as massive defense spending across both periods) on states that had historically spent little on public services and economic development helped steadily narrow the gap in per capita income between the states of the old Confederacy and the rest of the country from the 1930s until about 1980.
  • Since about 2008, Podhorzer calculates, the southern states at the heart of the red nation have again fallen further behind the blue nation in per capita income.
  • red states, as a group, are falling behind blue states on a broad range of economic and social outcomes—including economic productivity, family income, life expectancy, and “deaths of despair” from the opioid crisis and alcoholism.
  • other measures that show those places in a more favorable light
  • Housing is often more affordable in red states; partly for that reason, homelessness has become endemic in many big blue cities. Red-state taxes are generally lower than their blue counterparts. Many red states have experienced robust job growth
  • And red states across the Sun Belt rank among the nation’s fastest growing in population.
  • blue states are benefiting more as the nation transitions into a high-productivity, 21st-century information economy
  • red states (apart from their major metropolitan centers participating in that economy) are suffering as the powerhouse industries of the 20th century—agriculture, manufacturing, and fossil-fuel extraction—decline.
  • The gross domestic product per person and the median household income are now both more than 25 percent greater in the blue section than in the red,
  • The share of kids in poverty is more than 20 percent lower in the blue section than red, and the share of working households with incomes below the poverty line is nearly 40 percent lower.
  • Gun deaths are almost twice as high per capita in the red places as in the blue, as is the maternal mortality rate.
  • Per capita spending on elementary and secondary education is almost 50 percent higher in the blue states compared with red
  • All of the blue states have expanded access to Medicaid under the Affordable Care Act, while about 60 percent of the total red-nation population lives in states that have refused to do so.
  • All of the blue states have set a minimum wage higher than the federal level of $7.25, while only about one-third of the red-state residents live in places that have done so.
  • Right-to-work laws are common in the red states and nonexistent in the blue, with the result that the latter have a much higher share of unionized workers than the former
  • No state in the blue section has a law on the books banning abortion before fetal viability, while almost all of the red states are poised to restrict abortion rights
  • Almost all of the red states have also passed “stand your ground” laws backed by the National Rifle Association, which provide a legal defense for those who use weapons against a perceived threat, while none of the blue states have done so.
  • During the seven decades of legal Jim Crow segregation from the 1890s through the 1960s, the principal goal of the southern states at the core of red America was defensive: They worked tirelessly to prevent federal interference with state-sponsored segregation but did not seek to impose it on states outside the region.
  • Jim Crow segregation offers an important reference point for understanding how far red states might take this movement to roll back civil rights and liberties—not that they literally would seek to restore segregation, but that they are comfortable with “a time when states” had laws so “entirely different” that they created a form of domestic apartheid.
  • The flurry of socially conservative laws that red states have passed since 2021, on issues such as abortion; classroom discussions of race, gender, and sexual orientation; and LGBTQ rights, is widening this split. No Democratic-controlled state has passed any of those measures.
  • he documents a return to historical patterns from the Jim Crow era in which the dominant party (segregationist Democrats then, conservative Republicans now) has skewed the playing field to achieve a level of political dominance in the red nation far beyond its level of popular support
  • Undergirding that advantage, he argues, are laws that make registering or voting in many of the red states more difficult, and severe gerrymanders that have allowed Republicans to virtually lock in indefinite control of many state legislatures
  • how the United States will function with two sections that are moving so far apart.
  • History, in my view, offers two models
  • bedrock differences dating back to the country’s founding are resurfacing. And one crucial element of that, he argues, is the return of what he calls “one-party rule in the red nation.”
  • in the last years before the Civil War, the South’s political orientation was offensive: Through the courts (the 1857 Dred Scott decision) and in Congress (the Kansas-Nebraska Act in 1854), its principal aim was to authorize the expansion of slavery into more territories and states
  • Podhorzer, like Mason and Grumbach, believes that the MAGA movement’s long-term goal is to tilt the electoral rules in enough states to make winning Congress or the White House almost impossible for Democrats
  • Then, with support from the GOP-appointed majority on the Supreme Court, Republicans could impose red-state values and programs nationwide, even if most Americans oppose them. The “MAGA movement is not stopping at the borders of the states it already controls,” Podhorzer writes. “It seeks to conquer as much territory as possible by any means possible.”
  • The Trump model, in other words, is more the South in 1850 than the South in 1950, more John Calhoun than Richard Russell
  • it does mean that the 2020s may bring the greatest threats to the country’s basic stability since those dark and tumultuous years.
Javier E

Javier Milei, Trump and Bolsonaro admirer, leads Argentina presidential race - The Wash... - 0 views

  • Most of the thousands who packed the Movistar Arena for Milei’s campaign-closing rally on Wednesday were men, many of them young and all of them seemingly angry.
  • Angry with a leftist establishment that has failed to control spiraling inflation and economic stagnation. Angry with a government that has allowed their currency to plummet and their earnings to vanish.
  • Young people are a political force in Argentina. Young women here were on the front lines of massive protests for the “green wave” abortion rights movement that spread across Latin America. They’ve led a campaign for gender-inclusive Spanish and helped bring the populist movement of former Argentine leaders Juan and Eva “Evita” Perón back to power.
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  • Now, after the Peronista government of Alberto Fernández and Cristina Fernández de Kirchner has failed to halt the country’s economic decline, a new force among Argentina’s Generation Z is rising.
  • This time, it’s young men who are at the forefront. Milei is speaking for them.
  • An admirer of Donald Trump and former Brazilian president Jair Bolsonaro, Milei is campaigning on an Argentine version of “Drain the Swamp.” His aggressive style, outlandish comments and unusual presentation — he claims he hasn’t brushed that hair in years — have drawn millions of viewers to his videos and disrupted traditional politics
  • He has branded Pope Francis — the Argentine former Archbishop of Buenos Aires Jorge Bergoglio, the first South American pontiff — an “evil” leftist. Climate change, he says, is a “socialist lie.” He would hold a referendum to undo the three-year-old law that legalized abortion. He has called for creating a market for the sale of organs.
  • But he has also offered frustrated Argentines a break from the status quo: He has proposed shutting down the central bank, dollarizing the economy and taking a “chain saw” to government spending.
  • His attacks on the peso are already shocking the Argentine economy; the currency has taken a nose dive in the widely traded black market in recent weeks. The inflation rate has skyrocketed.
  • If Milei wins, it will likely be on the strength of the country’s young. Voters aged 18 to 29 account for a quarter of the electorate, and polls show they’re overwhelmingly inclined to vote for the iconoclast. That’s especially true for young men.
  • Coronel grew up watching the North American right-wing provocateurs Jordan Peterson, Ben Shapiro and Milo Yiannopoulos on a YouTube channel that translated their words into Spanish. “They were a fundamental part of my ideological awakening,” he said. But his greatest inspiration was Trump.
  • “We stopped listening to the intellectuals to listen to the politicians,” Coronel said.
  • “While everyone was focused on feminist demands and gay rights, there was a generation slowly starting to pay attention to Javier Milei.”
  • He decided to become an economist in 1989 during the early days of hyperinflation in Argentina. He worked as a risk analyst for Corporacion America, owned by one of Argentina’s billionaires, before leaping into television as a regular guest on shows.
  • Milei’s unconventional ideas and brash style — rants peppered with personal insults — was a TV hit. As the peso plunged and inflation skyrocketed, his economic theories began to find an audience.
  • He was elected to Congress in 2021 on pledges to tear the political elite down. He gained national prominence by raffling off his congressional salary each month.
  • Milei describes himself as a liberal-libertarian or a miniarchist. He supports limiting government to just a few functions — ideally, only security and justice — a night-watchman state.
  • He promises to slash the number of federal ministries from 18 to eight. He applies his free-market ideas to just about everything — he proposes loosening gun restrictions to “maximize the cost of robbery” — and letting the invisible hand of the market do the rest.
  • “Sometimes I have to pinch myself to ask whether I am living a dream or it’s a reality,” he told The Washington Post. “Because what Javier Milei proposes in politics hasn’t been heard in Argentina for 80 years.”
  • Milei’s originality is perhaps exactly why Gen Z is so transfixed by him. It’s a generation craving authenticity, Argentine political analyst Ana Iparraguirre said. “They see this guy telling it like it is,” she said. “I might not like that he’ll be selling guns in the streets, but at least this guy is not faking it.”
  • Most of his 1.4 million TikTok followers are younger than 24, according to his social media team. Iñaki Gutierrez, a 22-year old unpaid volunteer who manages his TikTok, said Milei managed to win the primaries in remote provinces “we didn’t even set foot in.” “TikTok was the answer,” Gutierrez said.
  • The fastest-growing social media site in Latin America has helped elect a wave of millennial presidents in the region, including Nayib Bukele in El Salvador and, last week, Daniel Noboa in Ecuador.
  • Milei’s TikTok posts offer Gen Z voters an outlet for rebellion against a system that they say is doing very little for them.
  • According to one recent survey, more than 65 percent of young voters say they would leave Argentina if they could.
  • “They feel they have no future,” Iparraguirre said. “If you’ve got nothing to lose you may as well try something different.”
  • Fragoso’s girlfriend, Victoria Alegre, 23, walking with him in a mall in Buenos Aires this week, said she thinks Milei is a machista who could roll back rights for women. Fragoso said he also dislikes the way Milei speaks about feminism. But he’s willing to overlook it, he said, to take a chance on something — anything — different.
  • “They said we were dangerous and that we needed to be quiet,” Milei shouted. “But we’re here, we fought the battle and we’re going to win!
peterconnelly

The U.S. is sending Ukraine advanced rocket systems to battle Russia. Here's why that m... - 0 views

  • Russia is advancing in the east behind a barrage of artillery that has strained Ukrainian defenses and Western unity over support for a protracted war.
  • President Joe Biden announced Wednesday that the U.S. would be sending Ukraine the high mobility artillery rocket system, or HIMARS. "This new package will arm them with new capabilities and advanced weaponry, including HIMARS with battlefield munitions, to defend their territory from Russian advances," he said in a statement.
  • He said that combined with their targeting capacity aided by commercial drones and counter battery radars, the systems would provide a “distinct qualitative and quantitative improvement” to Ukraine’s combat capability.
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  • MLRS missiles typically have a range of up to 40 miles, and can be equipped with GPS-guided missiles.
  • However they are unlikely to arrive in time to save swaths of the country's east from being battered and overrun.
  • saying Wednesday that Russian forces now control around 80 percent of the ruined city.
  • “The combination of artillery barrage, airstrikes and missile strikes is what we expected from Russia from the beginning of the war and they are grinding the Ukrainians down,” said William Alberque
  • “This is an active artillery war. A war in which you need long-range firepower," the official said. “This war is about shooting and moving. Who can shoot the longest and fastest wins.”
  • Biden on Monday told reporters that the U.S. would not “send to Ukraine rocket systems that can strike into Russia." A senior administration official said Ukraine has agreed not to use them to launch rockets into Russia.
  • Moscow's messaging over the long-range weapons systems showed it "knows exactly how to play on the West's doubts and fear of a direct NATO-Russia confrontation,"
  • “But each day the West hesitates is a day Russian artillery rules the battlefield. Russian advances are preceded by massive fire. Each city lost by Ukraine is a city leveled to the ground, making each retreat even more painful,” Horowitz said.
criscimagnael

The Race to Free Ukraine's Stranded Grain - The New York Times - 0 views

  • The Baltic Sea port has silos to store plenty of grain, railway lines to transport it there from Ukraine, where it has been trapped by the war, and a deep harbor ready for ships that can take it to Egypt, Yemen and other countries in desperate need of food.
  • “Starvation is near,
  • Belarus controls the railway lines offering the most direct, cheapest and fastest route for large volumes of grain out of Ukraine to Klaipeda and other Baltic ports.
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  • But using them would mean cutting a deal with a brutal leader closely allied with President Vladimir V. Putin of Russia, underscoring the painful moral and political decisions that now confront Western leaders as they scramble to avert a global food crisis.
  • The Lithuania route appears to be the most promising for getting food quickly to areas like the Middle East and Africa that need it the most, even if it is also a long shot.
  • “This is a decision that politicians need to take not me,” Mr. Latakas, the Klaipeda port director, said. “It is up to them to decide what is most important.”
  • Western nations like the United States, as well as Ukraine, oppose lifting sanctions imposed on Russia over its invasion but have not ruled out a deal with Belarus.
  • The war has halted those shipments, leaving around 25 million tons of grain, according to U.N. estimates, from last year’s harvest stranded in silos and at risk of rotting if it is not moved soon. A further 50 million tons is expected to be harvested in coming months. The grain elevators in Ukraine that have not been damaged or destroyed by shelling are quickly filling up. Soon, there will be no room left to store the incoming harvest.
  • Ukraine’s foreign minister, said severe bottlenecks meant that the existing routes through Poland and Romania “can provide only limited alleviation of the food crisis” given the volumes that need to be moved.
  • Warning of an approaching “hurricane of hunger,” the head of the United Nations, António Guterres, has sought to negotiate a deal under which Ukrainian grain would be transported out of the country by ship or train, and in exchange Russia and Belarus would sell fertilizer products to the global market without the threat of sanctions.
  • That means that Western governments and Ukraine are left to try out a range of possible solutions fraught with problems. Test runs of trains carrying grain from Ukraine through Poland to Lithuania, for example, have taken three weeks because of different track gauges in neighboring countries, requiring cargos to be loaded and unloaded multiples times.
  • Turkey has proposed using its ships to transport grain from Odesa, which, in addition to getting Ukraine to demine the port, would require an agreement from Russia not to hinder vessels.
  • But faced with the considerable challenges of executing such a plan, the best option for getting large quantities of Ukrainian grain to hungry people is probably by rail through Belarus to Klaipeda and other Baltic ports in Latvia and Estonia.That “won’t solve everything, but it would significantly alleviate the situation,”
  • Ukraine is opposed to any easing of sanctions against Russia but, increasingly desperate to move grain trapped by the war, is more open to the idea of a temporary easing of sanctions against Belarusian potash.
  • Roman Slaston, the head of Ukraine’s main agricultural lobby, said one challenge was that many rail connections through Belarus had been blown up by Belarusian railway employees sympathetic to the Ukrainian cause.
  • “Given that the Russian Army is still in Belarus, who is going to pay to repair that now?” Mr. Slaston asked. “This is like some kind of madness.”
  • We don’t grow food to store it,” he said. “People in Africa won’t be fed by our grain sitting in bags in our fields.”
Javier E

Opinion | The Global Transformation of Christianity Is Here - The New York Times - 0 views

  • in 1900, about 80 percent of the world’s Christian population lived in the Western world and about 20 percent in the majority world. By 2000, only 37 percent lived in the Western world, and nearly two-thirds lived in the majority world
  • Sub-Saharan Africa had the most striking growth of Christianity, growing from around 9 percent Christian at the beginning of the 20th century to almost 45 percent at the end of it. There are around 685 million Christians in Africa now.
  • “Christianity at the beginning of the 21st century,” said George, “is the most global and most diverse and the most dispersed faith.”
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  • the most explosive growth has been in Indigenous, independent Pentecostal churches
  • we ought to start talking about a new family of “spiritual” churches that have no historical ties to Western church traditions. These “spiritual” churches are largely not a result of colonial missions.
  • we tend to associate Christianity with white Westerners and European influence. At this point, our assumptions about this need to change. The largest church congregation in the world belongs to Yoido Full Gospel Church in Seoul, an Assemblies of God church, which has around 480,000 members
  • even conservative estimates guess there were around 98 million evangelical Christians globally in 1970. Now, there are over 342 million.
  • as Christianity booms overseas, more Christians are migrating to the United States. But there’s also evidence that migrants who come to here are finding immigrant-led churches and converting to Christianity after they arrive. These trends, George told me, are “globalizing American Christianity.”
  • Today, the three largest Protestant churches in Paris are Afro-Caribbean evangelical megachurches of a charismatic or Pentecostal bent
  • Immigration has been a huge factor in the demographic growth of the United States over the past decade. Much of that growth is attributable to Latinos, who now number around 62 million and represent just under 20 percent of the United States population. Some projections estimate that by 2060 there will be 111 million Latinos in the United States, constituting 28 percent of the population.
  • Latino evangelicals are the fastest growing segment of evangelicals in the country. It also said that “Latino Protestants, in particular, have higher levels of religiosity”
  • as of 2021, Pew reported that 29 percent of all adults identified as atheists, agnostics or “nothing in particular.”
  • alongside that trend, the changing demographics of Christianity promise to transform faith and religious discourse. We cannot assume that America will become more secular so long as the future of America is less white
  • it is difficult to provide definite statistics on how many evangelical and Pentecostal churches in America are led by Latinos, immigrants or other nonwhite or non-English-speaking pastors because many of these churches are small, non-organized and grass roots.
  • the standard American religious survey categories no longer account for the realities expressed in the church in America. “White evangelicalism,” “Protestant mainline” and “progressive” are categories that are largely defined by a white majority.
  • This “browning” of the church in America, as some scholars call it, scrambles all the categories. What we are seeing isn’t simply that white evangelicalism is changing; it’s that something new is emerging.
  • most hold convictions that overlap with traditional evangelicalism in substantial ways. They are by and large traditionally conservative about sexuality and marriage. They hold an authoritative view of the Bible and believe in miracles and supernatural occurrences.
  • But they tend to be more committed to social justice and, in George’s words, “communitarian” than many white evangelicals.
  • when he visits churches in Brazil and Argentina, “Sometimes the Catholics are more evangelical and Pentecostal” than even typical white evangelicals in America.
  • This influx of nonwhite believers will challenge white religious conservatives to choose between xenophobia and building alliances with immigrants who share their views on social issues.
  • These trends will also challenge them to unbundle their religious views on social issues from a kind of libertarian economics that harms those who are less wealthy
  • The future of American Christianity now appears to be a multiethnic community that is largely led by immigrants or the children of immigrants. And that reality ought to change our present conversations about religion in America.
Javier E

Generative AI Is Already Changing White Collar Work As We Know It - WSJ - 0 views

  • As ChatGPT and other generative artificial intelligence programs infiltrate workplaces, white-collar jobs are transforming the fastest.
  • The biggest workplace challenge so far this year across industries is how to adapt to the rapidly evolving role of AI in office work, they say.
  • according to a new study by researchers at the University of Pennsylvania and OpenAI, most jobs will be changed in some form by generative pretrained transformers, or GPTs, which use machine learning based on internet data to generate any kind of text, from creative writing to code. 
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  • “AI is the next revolution and there is no going back,”
  • that transformation is already taking shape, and workers can find ways to use the ChatGPT and other new technology to free them from boring work.
  • “Every month there are hundreds more job postings mentioning generative AI,”
  • “The way things have been done in the past aren’t necessarily the way they need to be done today,” he said, adding that workers and employers should invest in retraining and upskilling where possible.
  • “There is an enormous demand for people who are tech-savvy and who will be the first adopters, who will be the first to figure out what opportunities these technologies open up,”
  • The jobs of the future will require a mind-set shift for employees, several executives said. Rather than viewing generative AI and other machine-learning software as a threat, workers should embrace new technology as a way to free them from less-rewarding work and augment their strengths.
  • “This is a huge opportunity to advance a lot of professions—allow people to do work that’s, frankly, more stimulating.”
  • For the hotel chain, that could look like using AI to determine which brand of wine a guest likes, and adjusting recommendations accordingly.
  • United Airlines Holdings Inc., aims to use AI to do transactions that shouldn’t require a human, such as placing someone in an aisle or window seat depending on their preference, or suggesting a different flight for someone trying to book a tight connection, said Kate Gebo, executive vice president of human resources and labor relations. That leaves employees free to have more complex interactions with customers
  • services intended to help customers solve emotional problems require solutions a machine can’t provide.
  • “AI is not sentient. It can’t be emotional. And that is the kind of accountability and reciprocity that is needed…for people to have the outcomes that we’re hoping to provide,”
  • “Certain business processes could be enhanced,” said Carmen Orr, Yelp’s chief people officer, adding that there are plenty of concerns, too. “We don’t want it for high human-touch things.”
Javier E

The Contradictions of Sam Altman, the AI Crusader Behind ChatGPT - WSJ - 0 views

  • Mr. Altman said he fears what could happen if AI is rolled out into society recklessly. He co-founded OpenAI eight years ago as a research nonprofit, arguing that it’s uniquely dangerous to have profits be the main driver of developing powerful AI models.
  • He is so wary of profit as an incentive in AI development that he has taken no direct financial stake in the business he built, he said—an anomaly in Silicon Valley, where founders of successful startups typically get rich off their equity. 
  • His goal, he said, is to forge a new world order in which machines free people to pursue more creative work. In his vision, universal basic income—the concept of a cash stipend for everyone, no strings attached—helps compensate for jobs replaced by AI. Mr. Altman even thinks that humanity will love AI so much that an advanced chatbot could represent “an extension of your will.”
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  • The Tesla Inc. CEO tweeted in February that OpenAI had been founded as an open-source nonprofit “to serve as a counterweight to Google, but now it has become a closed source, maximum-profit company effectively controlled by Microsoft. Not what I intended at all.”
  • Backers say his brand of social-minded capitalism makes him the ideal person to lead OpenAI. Others, including some who’ve worked for him, say he’s too commercially minded and immersed in Silicon Valley thinking to lead a technological revolution that is already reshaping business and social life. 
  • In the long run, he said, he wants to set up a global governance structure that would oversee decisions about the future of AI and gradually reduce the power OpenAI’s executive team has over its technology. 
  • OpenAI researchers soon concluded that the most promising path to achieve artificial general intelligence rested in large language models, or computer programs that mimic the way humans read and write. Such models were trained on large volumes of text and required a massive amount of computing power that OpenAI wasn’t equipped to fund as a nonprofit, according to Mr. Altman. 
  • In its founding charter, OpenAI pledged to abandon its research efforts if another project came close to building AGI before it did. The goal, the company said, was to avoid a race toward building dangerous AI systems fueled by competition and instead prioritize the safety of humanity.
  • While running Y Combinator, Mr. Altman began to nurse a growing fear that large research labs like DeepMind, purchased by Google in 2014, were creating potentially dangerous AI technologies outside the public eye. Mr. Musk has voiced similar concerns of a dystopian world controlled by powerful AI machines. 
  • Messrs. Altman and Musk decided it was time to start their own lab. Both were part of a group that pledged $1 billion to the nonprofit, OpenAI Inc. 
  • Mr. Altman said he doesn’t necessarily need to be first to develop artificial general intelligence, a world long imagined by researchers and science-fiction writers where software isn’t just good at one specific task like generating text or images but can understand and learn as well or better than a human can. He instead said OpenAI’s ultimate mission is to build AGI, as it’s called, safely.
  • “We didn’t have a visceral sense of just how expensive this project was going to be,” he said. “We still don’t.”
  • Tensions also grew with Mr. Musk, who became frustrated with the slow progress and pushed for more control over the organization, people familiar with the matter said. 
  • OpenAI executives ended up reviving an unusual idea that had been floated earlier in the company’s history: creating a for-profit arm, OpenAI LP, that would report to the nonprofit parent. 
  • Reid Hoffman, a LinkedIn co-founder who advised OpenAI at the time and later served on the board, said the idea was to attract investors eager to make money from the commercial release of some OpenAI technology, accelerating OpenAI’s progress
  • “You want to be there first and you want to be setting the norms,” he said. “That’s part of the reason why speed is a moral and ethical thing here.”
  • The decision further alienated Mr. Musk, the people familiar with the matter said. He parted ways with OpenAI in February 2018. 
  • Mr. Musk announced his departure in a company all-hands, former employees who attended the meeting said. Mr. Musk explained that he thought he had a better chance at creating artificial general intelligence through Tesla, where he had access to greater resources, they said.
  • OpenAI said that it received about $130 million in contributions from the initial $1 billion pledge, but that further donations were no longer needed after the for-profit’s creation. Mr. Musk has tweeted that he donated around $100 million to OpenAI. 
  • Mr. Musk’s departure marked a turning point. Later that year, OpenAI leaders told employees that Mr. Altman was set to lead the company. He formally became CEO and helped complete the creation of the for-profit subsidiary in early 2019.
  • A young researcher questioned whether Mr. Musk had thought through the safety implications, the former employees said. Mr. Musk grew visibly frustrated and called the intern a “jackass,” leaving employees stunned, they said. It was the last time many of them would see Mr. Musk in person.  
  • In the meantime, Mr. Altman began hunting for investors. His break came at Allen & Co.’s annual conference in Sun Valley, Idaho in the summer of 2018, where he bumped into Satya Nadella, the Microsoft CEO, on a stairwell and pitched him on OpenAI. Mr. Nadella said he was intrigued. The conversations picked up that winter.
  • “I remember coming back to the team after and I was like, this is the only partner,” Mr. Altman said. “They get the safety stuff, they get artificial general intelligence. They have the capital, they have the ability to run the compute.”   
  • Mr. Altman disagreed. “The unusual thing about Microsoft as a partner is that it let us keep all the tenets that we think are important to our mission,” he said, including profit caps and the commitment to assist another project if it got to AGI first. 
  • Some employees still saw the deal as a Faustian bargain. 
  • OpenAI’s lead safety researcher, Dario Amodei, and his lieutenants feared the deal would allow Microsoft to sell products using powerful OpenAI technology before it was put through enough safety testing,
  • They felt that OpenAI’s technology was far from ready for a large release—let alone with one of the world’s largest software companies—worrying it could malfunction or be misused for harm in ways they couldn’t predict.  
  • Mr. Amodei also worried the deal would tether OpenAI’s ship to just one company—Microsoft—making it more difficult for OpenAI to stay true to its founding charter’s commitment to assist another project if it got to AGI first, the former employees said.
  • Microsoft initially invested $1 billion in OpenAI. While the deal gave OpenAI its needed money, it came with a hitch: exclusivity. OpenAI agreed to only use Microsoft’s giant computer servers, via its Azure cloud service, to train its AI models, and to give the tech giant the sole right to license OpenAI’s technology for future products.
  • In a recent investment deck, Anthropic said it was “committed to large-scale commercialization” to achieve the creation of safe AGI, and that it “fully committed” to a commercial approach in September. The company was founded as an AI safety and research company and said at the time that it might look to create commercial value from its products. 
  • Mr. Altman “has presided over a 180-degree pivot that seems to me to be only giving lip service to concern for humanity,” he said. 
  • “The deal completely undermines those tenets to which they secured nonprofit status,” said Gary Marcus, an emeritus professor of psychology and neural science at New York University who co-founded a machine-learning company
  • The cash turbocharged OpenAI’s progress, giving researchers access to the computing power needed to improve large language models, which were trained on billions of pages of publicly available text. OpenAI soon developed a more powerful language model called GPT-3 and then sold developers access to the technology in June 2020 through packaged lines of code known as application program interfaces, or APIs. 
  • Mr. Altman and Mr. Amodei clashed again over the release of the API, former employees said. Mr. Amodei wanted a more limited and staged release of the product to help reduce publicity and allow the safety team to conduct more testing on a smaller group of users, former employees said. 
  • Mr. Amodei left the company a few months later along with several others to found a rival AI lab called Anthropic. “They had a different opinion about how to best get to safe AGI than we did,” Mr. Altman said.
  • Anthropic has since received more than $300 million from Google this year and released its own AI chatbot called Claude in March, which is also available to developers through an API. 
  • Mr. Altman shared the contract with employees as it was being negotiated, hosting all-hands and office hours to allay concerns that the partnership contradicted OpenAI’s initial pledge to develop artificial intelligence outside the corporate world, the former employees said. 
  • In the three years after the initial deal, Microsoft invested a total of $3 billion in OpenAI, according to investor documents. 
  • More than one million users signed up for ChatGPT within five days of its November release, a speed that surprised even Mr. Altman. It followed the company’s introduction of DALL-E 2, which can generate sophisticated images from text prompts.
  • By February, it had reached 100 million users, according to analysts at UBS, the fastest pace by a consumer app in history to reach that mark.
  • n’s close associates praise his ability to balance OpenAI’s priorities. No one better navigates between the “Scylla of misplaced idealism” and the “Charybdis of myopic ambition,” Mr. Thiel said. 
  • Mr. Altman said he delayed the release of the latest version of its model, GPT-4, from last year to March to run additional safety tests. Users had reported some disturbing experiences with the model, integrated into Bing, where the software hallucinated—meaning it made up answers to questions it didn’t know. It issued ominous warnings and made threats. 
  • “The way to get it right is to have people engage with it, explore these systems, study them, to learn how to make them safe,” Mr. Altman said.
  • After Microsoft’s initial investment is paid back, it would capture 49% of OpenAI’s profits until the profit cap, up from 21% under prior arrangements, the documents show. OpenAI Inc., the nonprofit parent, would get the rest.
  • He has put almost all his liquid wealth in recent years in two companies. He has put $375 million into Helion Energy, which is seeking to create carbon-free energy from nuclear fusion and is close to creating “legitimate net-gain energy in a real demo,” Mr. Altman said.
  • He has also put $180 million into Retro, which aims to add 10 years to the human lifespan through “cellular reprogramming, plasma-inspired therapeutics and autophagy,” or the reuse of old and damaged cell parts, according to the company. 
  • He noted how much easier these problems are, morally, than AI. “If you’re making nuclear fusion, it’s all upside. It’s just good,” he said. “If you’re making AI, it is potentially very good, potentially very terrible.” 
Javier E

Facebook's hardware ambitions are undercut by its anti-China strategy - The Washington ... - 0 views

  • For more than a year, Meta CEO Mark Zuckerberg has made a point of stoking fears about China. He’s told U.S. lawmakers that China “steals” American technology and played up nationalist concerns about threats from Chinese-owned rival TikTok.
  • Meta has a growing problem: The social media service wants to transform itself into a powerhouse in hardware, and it makes virtually all of it in China.So the company is racing to get out.
  • Facebook has hit walls, say three people familiar with the discussions, who spoke on the condition of anonymity to describe internal conversations.
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  • Until recently, the people said, Meta executives viewed the company’s reliance on China to make Oculus virtual reality headsets as a relatively minor concern because the company’s core focus was its social media and messaging apps.
  • All that has changed now that Meta has rebranded itself as a hardware company
  • “Meta is building a complicated hardware product. You can’t just turn on a dime and make it elsewhere,”
  • Facebook’s public criticism of China began in 2019 when Zuckerberg warned, in a speech at Georgetown University, that China was exporting a dangerous vision for the internet to the rest of the world — and noted that Facebook was abandoning its efforts to break into that country’s market.
  • The anti-China stance has since extended into a full-blown corporate strategy. Nick Clegg, the company’s president, wrote an op-ed attacking China in The Washington Post in 2020, the same year Zuckerberg attacked China in a congressional antitrust hearing.
  • At the antitrust hearing in Congress in 2020, Zuckerberg used his opening remarks to attack China in terms that went much further than his industry peers. He said it was “well-documented that the Chinese government steals technology from American companies,” and repeated that the country was “building its own version of the internet” that went against American values. He described Facebook as a “proudly American” company and noted that TikTok was the company’s fastest-growing rival.
  • “They were trying to find things that [Zuckerberg] could agree with Trump on, and it’s a pretty slim list,” said one of the people, describing how the company landed on its anti-China strategy. “If you’re not going to try to be in this country anyway, you might as well use it to your political advantage by contrasting yourself with Apple and TikTok.”
Javier E

Opinion | America, China and a Crisis of Trust - The New York Times - 0 views

  • some eye-popping new realities about what’s really eating away at U.S.-China relations.
  • The new, new thing has a lot to do with the increasingly important role that trust, and its absence, plays in international relations, now that so many goods and services that the United States and China sell to one another are digital, and therefore dual use — meaning they can be both a weapon and a tool.
  • In the last 23 years America has built exactly one sort-of-high-speed rail line, the Acela, serving 15 stops between Washington, D.C., and Boston. Think about that: 900 to 15.
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  • it is easy to forget how much we have in common as people. I can’t think of any major nation after the United States with more of a Protestant work ethic and naturally capitalist population than China.
  • These days, it is extremely difficult for a visiting columnist to get anyone — a senior official or a Starbucks barista — to speak on the record. It was not that way a decade ago.
  • The Communist Party’s hold is also a product of all the hard work and savings of the Chinese people, which have enabled the party and the state to build world-class infrastructure and public goods that make life for China’s middle and lower classes steadily better.
  • Beijing and Shanghai, in particular, have become very livable cities, with the air pollution largely erased and lots of new, walkable green spaces.
  • some 900 cities and towns in China are now served by high-speed rail, which makes travel to even remote communities incredibly cheap, easy and comfortable
  • Just when trust has become more important than ever between the U.S. and China, it also has become scarcer than ever. Bad trend.
  • China’s stability is a product of both an increasingly pervasive police state and a government that has steadily raised standards of living. It’s a regime that takes both absolute control and relentless nation-building seriously.
  • For an American to fly from New York’s Kennedy Airport into Beijing Capital International Airport today is to fly from an overcrowded bus terminal to a Disney-like Tomorrowland.
  • China got an early jump on A.I. in two realms — facial recognition technology and health records — because there are virtually no privacy restrictions on the government’s ability to build huge data sets for machine learning algorithms to find patterns.
  • “ChatGPT is prompting some people to ask if the U.S. is rising again, like in the 1990s,”
  • “I understand your feeling: You have been in the first place for a century, and now China is rising, and we have the potential to become the first — and that is not easy for you,” Hu said to me. But “you should not try to stop China’s development. You can’t contain China in the end. We are quite smart. And very diligent. We work very hard. And we have 1.4 billion people.”
  • Before the Trump presidency, he added: “We never thought China-U.S. relations would ever become so bad. Now we gradually accept the situation, and most Chinese people think there is no hope for better relations. We think the relationship will be worse and worse and hope that war will not break out between our two countries.”
  • A lot of people hesitated when I asked. Indeed, many would answer with some version of “I’m not sure, I just know that it’s THEIR fault.”
  • t was repeated conversations like these that got me started asking American, Chinese and Taiwanese investors, analysts and officials a question that has been nagging at me for a while: What exactly are America and China fighting about?
  • the real answer is so much deeper and more complex than just the usual one-word response — “Taiwan” — or the usual three-word response — “autocracy versus democracy.”
  • Let me try to peel back the layers. The erosion in U.S.-China relations is a result of something old and obvious — a traditional great-power rivalry between an incumbent power (us) and a rising power (China) — but with lots of new twists
  • One of the twists, though, is that this standard-issue great-power rivalry is occurring between nations that have become as economically intertwined as the strands of a DNA molecule. As a result, neither China nor America has ever had a rival quite like the other.
  • in modern times, China, like America, has never had to deal with a true economic and military peer with which it was also totally intertwined through trade and investment.
  • Another new twist, and a reason it’s hard to define exactly what we’re fighting about, has a lot to do with how this elusive issue of trust and the absence of it have suddenly assumed much greater importance in international affairs.
  • This is a byproduct of our new technological ecosystem in which more and more devices and services that we both use and trade are driven by microchips and software, and connected through data centers in the cloud and high-speed internet
  • so many more things became “dual use.” That is, technologies that can easily be converted from civilian tools to military weapons, or vice versa.
  • no one country or company can own the whole supply chain. You need the best from everywhere, and that supply chain is so tightly intertwined that each company has to trust the others intimately.
  • when we install the ability to sense, digitize, connect, process, learn, share and act into more and more things — from your GPS-enabled phone to your car to your toaster to your favorite app — they all become dual use, either weapons or tools depending on who controls the software running them and who owns the data that they spin off.
  • As long as most of what China sold us was shallow goods, we did not care as much about its political system — doubly so because it seemed for a while as if China was slowly but steadily becoming more and more integrated with the world and slightly more open and transparent every year. So, it was both easy and convenient to set aside some of our worries about the dark sides of its political system.
  • when you want to sell us ‘deep goods’ — goods that are dual use and will go deep into our homes, bedrooms, industries, chatbots and urban infrastructure — we don’t have enough trust to buy them. So, we are going to ban Huawei and instead pay more to buy our 5G telecom systems from Scandinavian companies we do trust: Ericsson and Nokia.”
  • as we’ve seen in Ukraine, a smartphone can be used by Grandma to call the grandkids or to call a Ukrainian rocket-launching unit and give it the GPS coordinates of a Russian tank in her backyard.
  • So today, the country or countries that can make the fastest, most powerful and most energy efficient microchips can make the biggest A.I. computers and dominate in economics and military affairs.
  • As more and more products and services became digitized and electrified, the microchips that powered everything became the new oil. What crude oil was to powering 19th- and 20th-century economies, microchips are for powering 21st-century economies.
  • When you ask them what is the secret that enables TSMC to make 90 percent of the world’s most advanced logic chips — while China, which speaks the same language and shares the same recent cultural history, makes zero — their answer is simple: “trust.”
  • TSMC is a semiconductor foundry, meaning it takes the designs of the most advanced computer companies in the world — Apple, Qualcomm, Nvidia, AMD and others — and turns the designs into chips that perform different processing functions
  • TSMC makes two solemn oaths to its customers: TSMC will never compete against them by designing its own chips and it will never share the designs of one of its customers with another.
  • “Our business is to serve multiple competitive clients,” Kevin Zhang, senior vice president for business development at TSMC, explained to me. “We are committed not to compete with any of them, and internally our people who serve customer A will never leak their information to customer C.”
  • But by working with so many trusted partners, TSMC leverages the partners’ steadily more complex designs to make itself better — and the better it gets, the more advanced designs it can master for its customers. This not only requires incredibly tight collaboration between TSMC and its customers, but also between TSMC and its roughly 1,000 critical local and global suppliers.
  • As the physics of chip making gets more and more extreme, “the investment from customers is getting bigger and bigger, so they have to work with us more closely to make sure they harvest as much [computing power] as they can. They have to trust you.”
  • China also has a foundry, Semiconductor Manufacturing International Corporation, which is partly state-owned. But guess what? Because no global chip designers trust SMIC with their most advanced designs, it is at least a decade behind TSMC.
  • It’s for these reasons that the erosion in U.S.-China relations goes beyond our increasingly sharp disagreements over Taiwan. It is rooted in the fact that just when trust, and its absence, became much bigger factors in international affairs and commerce, China changed its trajectory. It made itself a less trusted partner right when the most important technology for the 21st century — semiconductors — required unprecedented degrees of trust to manufacture and more and more devices and services became deep and dual use.
  • when American trade officials said: “Hey, you need to live up to your W.T.O. commitments to restrict state-funding of industries,” China basically said: “Why should we live by your interpretation of the rules? We are now big enough to make our own interpretations. We’re too big; you’re too late.”
  • Combined with China’s failure to come clean on what it knew about the origins of Covid-19, its crackdown on democratic freedoms in Hong Kong and on the Uyghur Muslim minority in Xinjiang, its aggressive moves to lay claim to the South China Sea, its increasing saber rattling toward Taiwan, its cozying up to Vladimir Putin (despite his savaging of Ukraine), Xi’s moves toward making himself president for life, his kneecapping of China’s own tech entrepreneurs, his tighter restrictions on speech and the occasional abduction of a leading Chinese businessman — all of these added up to one very big thing: Whatever trust that China had built up with the West since the late 1970s evaporated at the exact moment in history when trust, and shared values, became more important than ever in a world of deep, dual-use products driven by software, connectivity and microchips.
  • it started to matter a lot more to Western nations generally and the United States in particular that this rising power — which we were now selling to or buying from all sorts of dual-use digital devices or apps — was authoritarian.
  • eijing, for its part, argues that as China became a stronger global competitor to America — in deep goods like Huawei 5G — the United States simply could not handle it and decided to use its control over advanced semiconductor manufacturing and other high-tech exports from America, as well as from our allies, to ensure China always remained in our rearview mirror
  • Beijing came up with a new strategy, called “dual circulation.” It said: We will use state-led investments to make everything we possibly can at home, to become independent of the world. And we will use our manufacturing prowess to make the world dependent on our exports.
  • Chinese officials also argue that a lot of American politicians — led by Trump but echoed by many in Congress — suddenly seemed to find it very convenient to put the blame for economic troubles in the U.S.’s middle class not on any educational deficiencies, or a poor work ethic, or automation or the 2008 looting by financial elites, and the crisis that followed, but on China’s exports to the United States.
  • As Beijing sees it, China not only became America’s go-to boogeyman, but in their frenzy to blame Beijing for everything, members of Congress started to more recklessly promote Taiwan’s independence.
  • Xi told President Biden at their summit in Bali in November, in essence: I will not be the president of China who loses Taiwan. If you force my hand, there will be war. You don’t understand how important this is to the Chinese people. You’re playing with fire.
  • at some level Chinese officials now understand that, as a result of their own aggressive actions in recent years on all the fronts I’ve listed, they have frightened both the world and their own innovators at precisely the wrong time.
  • I don’t buy the argument that we are destined for war. I believe that we are doomed to compete with each other, doomed to cooperate with each other and doomed to find some way to balance the two. Otherwise we are both going to have a very bad 21st century.
  • I have to say, though, Americans and Chinese remind me of Israelis and Palestinians in one respect: They are both expert at aggravating the other’s deepest insecurities.
  • China’s Communist Party is now convinced that America wants to bring it down, which some U.S. politicians are actually no longer shy about suggesting. So, Beijing is ready to crawl into bed with Putin, a war criminal, if that is what it takes to keep the Americans at bay.
  • Americans are now worried that Communist China, which got rich by taking advantage of a global market shaped by American rules, will use its newfound market power to unilaterally change those rules entirely to its advantage. So we’ve decided to focus our waning strength vis-à-vis Beijing on ensuring the Chinese will always be a decade behind us on microchips.
  • I don’t know what is sufficient to reverse these trends, but I think I know what is necessary.
  • If it is not the goal of U.S. foreign policy to topple the Communist regime in China, the United States needs to make that crystal clear, because I found a lot more people than ever before in Beijing think otherwise.
  • As for China, it can tell itself all it wants that it has not taken a U-turn in recent years. But no one is buying it. China will never realize its full potential — in a hyper-connected, digitized, deep, dual-use, semiconductor-powered world — unless it understands that establishing and maintaining trust is now the single most important competitive advantage any country or company can have. And Beijing is failing in that endeavor.
  • In his splendid biography of the great American statesman George Shultz, Philip Taubman quotes one of Shultz’s cardinal rules of diplomacy and life: “Trust is the coin of the realm.”
Javier E

He Turned 55. Then He Started the World's Most Important Company. - WSJ - 0 views

  • You probably use a device with a chip made by TSMC every day, but TSMC does not actually design or market those chips. That would have sounded completely absurd before the existence of TSMC. Back then, companies designed chips that they manufactured themselves. Chang’s radical idea for a great semiconductor company was one that would exclusively manufacture chips that its customers designed. By not designing or selling its own chips, TSMC never competed with its own clients. In exchange, they wouldn’t have to bother running their own fabrication plants, or fabs, the expensive and dizzyingly sophisticated facilities where circuits are carved on silicon wafers.
  • The innovative business model behind his chip foundry would transform the industry and make TSMC indispensable to the global economy. Now it’s the company that Americans rely on the most but know the least about
  • I wanted to know more about his decision to start a new company when he could have stopped working altogether. What I discovered was that his age was one of his assets. Only someone with his experience and expertise could have possibly executed his plan for TSMC. 
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  • “I could not have done it sooner,” he says. “I don’t think anybody could have done it sooner. Because I was the first one.” 
  • By the late 1960s, he was managing TI’s integrated-circuit division. Before long, he was running the entire semiconductor group. 
  • He transferred to the Massachusetts Institute of Technology, where he studied mechanical engineering, earned his master’s degree and would have stayed for his Ph.D. if he hadn’t failed the qualifying exam. Instead, he got his first job in semiconductors and moved to Texas Instruments in 1958
  • he came along as the integrated circuit was being invented, and his timing couldn’t have been any better, as Chang belonged to the first generation of semiconductor geeks. He developed a reputation as a tenacious manager who could wring every possible improvement out of production lines, which put his career on the fast track.
  • Chang grew up dreaming of being a writer—a novelist, maybe a journalist—and he planned to major in English literature at Harvard University. But after his freshman year, he decided that what he actually wanted was a good job
  • “They talk about life-work balance,” he says. “That’s a term I didn’t even know when I was their age. Work-life balance. When I was their age, if there was no work, there was no life.” 
  • These days, TSMC is investing $40 billion to build plants in Arizona, but the project has been stymied by delays, setbacks and labor shortages, and Chang told me that some of TSMC’s young employees in the U.S. have attitudes toward work that he struggles to understand. 
  • Chang says he wouldn’t have taken the risk of moving to Taiwan if he weren’t financially secure. In fact, he didn’t take that same risk the first time he could have.
  • “The closer the industry match,” they wrote, “the greater the success rate.” 
  • By then, Chang knew that he wasn’t long for Texas Instruments. But his stock options hadn’t vested, so he turned down the invitation to Taiwan. “I was not financially secure yet,” he says. “I was never after great wealth. I was only after financial security.” For this corporate executive in the middle of the 1980s, financial security equated to $200,000 a year. “After tax, of course,” he says. 
  • Chang’s situation had changed by the time Li called again three years later. He’d exercised a few million dollars of stock options and bought tax-exempt municipal bonds that paid enough for him to be financially secure by his living standards. Once he’d achieved that goal, he was ready to pursue another one. 
  • “There was no certainty at all that Taiwan would give me the chance to build a great semiconductor company, but the possibility existed, and it was the only possibility for me,” Chang says. “That’s why I went to Taiwan.” 
  • Not long ago, a team of economists investigated whether older entrepreneurs are more successful than younger ones. By scrutinizing Census Bureau records and freshly available Internal Revenue Service data, they were able to identify 2.7 million founders in the U.S. who started companies between 2007 and 2014. Then they looked at their ages.
  • The average age of those entrepreneurs at the founding of their companies was 41.9. For the fastest-growing companies, that number was 45. The economists also determined that 50-year-old founders were almost twice as likely to achieve major success as 30-year-old founders, while the founders with the lowest chance of success were the ones in their early 20s
  • “Successful entrepreneurs are middle-aged, not young,” they wrote in their 2020 paper.  
  • Silicon Valley’s venture capitalists throw money at talented young entrepreneurs in the hopes they will start the next trillion-dollar company. They have plentiful energy, insatiable ambition and the vision to peek around corners and see the future. What they don’t typically have are mortgages, family obligations and other adult responsibilities to distract them or diminish their appetite for risk. Chang himself says that younger people are more innovative when it comes to science and technical subjects. 
  • But in business, older is better. Entrepreneurs in their 40s and 50s may not have the exuberance to believe they will change the world, but they have the experience to know how they actually can. Some need years of specialized training before they can start a company. In biotechnology, for example, founders are more likely to be college professors than college dropouts. Others require the lessons and connections they accumulate over the course of their careers. 
  • one more finding from their study of U.S. companies that helps explain the success of a chip maker in Taiwan. It was that prior employment in the area of their startups—both the general sector and specific industry—predicted “a vastly higher probability” of success.
  • Chang was such a workaholic that he made sales calls on his honeymoon and had no patience for those who didn’t share his drive
  • Morris Chang had 30 years of experience in his industry when he decided to uproot his life and move to another continent. He knew more about semiconductors than just about anyone on earth—and certainly more than anyone in Taiwan. As soon as he started his job at the Industrial Technology Research Institute, Chang was summoned to K.T. Li’s office and given a second job. “He felt I should start a semiconductor company in Taiwan,”
  • “I decided right away that this could not be the kind of great company that I wanted to build at either Texas Instruments or General Instrument,”
  • TI handled every part of chip production, but what worked in Texas would not translate to Taiwan. The only way that he could build a great company in his new home was to make a new sort of company altogether, one with a business model that would exploit the country’s strengths and mitigate its many weaknesses.
  • Chang determined that Taiwan had precisely one strength in the chip supply chain. The research firm that he was now running had been experimenting with semiconductors for the previous 10 years. When he studied that decade of data, Chang was pleasantly surprised by Taiwan’s yields, the percentage of working chips on silicon wafers. They were almost twice as high in Taiwan as they were in the U.S., he said. 
  • “People were ingrained in thinking the secret sauce of a successful semiconductor company was in the wafer fab,” Campbell told me. “The transition to the fabless semiconductor model was actually pretty obvious when you thought about it. But it was so against the prevailing wisdom that many people didn’t think about it.” 
  • Taiwan’s government took a 48% stake, with the rest of the funding coming from the Dutch electronics giant Philips and Taiwan’s private sector, but Chang was the driving force behind the company. The insight to build TSMC around such an unconventional business model was born from his experience, contacts and expertise. He understood his industry deeply enough to disrupt it. 
  • “TSMC was a business-model innovation,” Chang says. “For innovations of that kind, I think people of a more advanced age are perhaps even more capable than people of a younger age.”
  • the personal philosophy that he’d developed over the course of his long career. “To be a partner to our customers,” he says. That founding principle from 1987 is the bedrock of the foundry business to this day, as TSMC says the key to its success has always been enabling the success of its customers.  
  • TSMC manufactures chips in iPhones, iPads and Mac computers for Apple, which manufactures a quarter of TSMC’s net revenue. Nvidia is often called a chip maker, which is curious, because it doesn’t make chips. TSMC does. 
  • Churning out identical copies of a single chip for an iPhone requires one TSMC fab to produce more than a quintillion transistors—that is, one million trillions—every few months. In a year, the entire semiconductor industry produces “more transistors than the combined quantity of all goods produced by all other companies, in all other industries, in all human history,” Miller writes. 
  • I asked how he thought about success when he moved to Taiwan. “The highest degree of success in 1985, according to me, was to build a great company. A lower degree of success was at least to do something that I liked to do and I wanted to do,” he says. “I happened to achieve the highest degree of success that I had in mind.” 
Javier E

Immigration powered the economy, job market amid border negotiations - The Washington Post - 0 views

  • There isn’t much data on how many of the new immigrants in recent years were documented versus undocumented. But estimates from the Pew Research Center last fall showed that undocumented immigrants made up 22 percent of the total foreign-born U.S. population in 2021. That’s down compared to previous decades: Between 2007 and 2021, the undocumented population fell by 14 percent, Pew found. Meanwhile, the legal immigrant population grew by 29 percent.
  • immigrant workers are supporting tremendously — and likely will keep powering for years to come.
  • The economy is projected to grow by $7 trillion more over the next decade than it would have without new influxes of immigrants, according to the CBO.
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  • Fresh estimates from the Congressional Budget Office this month said the U.S. labor force in 2023 had grown by 5.2 million people, thanks especially to net immigration
  • The sudden snapback in demand sent inflation soaring. Supply chain issues were a main reason prices rose quickly. But labor shortages posed a problem, too, and economists feared that rising wages — as employers scrambled to find workers — would keep price increases dangerously high.
  • he flow of migrants to the United States started slowing during the Trump administration, when officials took hundreds of executive actions designed to restrict migration.
  • Right before the pandemic, there were about 1.5 million fewer working-age immigrants in the United States than pre-2017 trends would have predicted, according to the San Francisco Fed. By the end of 2021, that shortfall had widened to about 2 million
  • But the economy overall wound up rebounding aggressively from the sudden, widespread closures of 2020, bolstered by historic government stimulus and vaccines that debuted faster than expected.
  • economy grow. But today’s snapshot still represents a stark turnaround from just a short time ago.
  • That’s because the labor force that emerged as the pandemic ebbed was smaller than it had been: Millions of people retired early, stayed home to take over child care or avoid getting sick, or decided to look for new jobs entirely
  • In the span of a year or so, employers went from having businesses crater to sprinting to hire enough staff to keep restaurants, hotels, retail stores and construction sites going. Wages for the lowest earners rose at the fastest pace.
  • About the same time, the path was widening for migrants to cross the southern border, particularly as the new Biden administration rolled back Trump-era restrictions.
  • Experts argue that the strength of the U.S. economy has benefited American workers and foreign-born workers alike. Each group accounts for roughly half of the labor market’s impressive year-over-year growth since January 2023
  • But the past few years were extremely abnormal because companies were desperate to hire.
  • lus, it would be exceedingly difficult for immigration to affect the wages of enormous swaths of the labor force,
  • “What it can do is lower the wages of a specific occupation in a specific area, but American workers aren’t stupid. They change jobs. They change what they specialize in,” Nowrasteh said. “So that’s part of the reason why wages don’t go down.”
  • In normal economic times, some analysts note, new immigrants can drag down wages, especially if employers decide to hire them over native-born workers. Undocumented workers, who don’t have as much leverage to push for higher pay, could lower average wages even more.
  • Particularly for immigrants fleeing poorer countries, the booming U.S. job market and the promise of higher wages continue to be an enormous draw.
  • “More than any immigration policy per se, the biggest pull for migrants is the strength of the labor market,” said Catalina Amuedo-Dorantes, an economics professor at the University of California at Merced. “More than any enforcement policy, any immigration policy, at the end of the day.”
  • Upon arriving in Denver in October, Santander hadn’t acquired a work permit but needed to feed his small children. Even without authorization, he found a job as a roofer for a contractor that ultimately pocketed his earnings, then one cleaning industrial refrigerators on the overnight shift for $12 an hour. Since receiving his work permit in January, Santander has started “a much better job” at a wood accessories manufacturer making $20 an hour.
  • But for the vast majority of migrants who arrive in the United States without prior approval, including asylum seekers and those who come for economic reasons, getting a work permit isn’t easy.
  • Federal law requires migrants to wait nearly six months to receive a work permit after filing for asylum. Wait times can stretch for additional months because of a backlog in cases.
  • While they wait, many migrants find off-the-books work as day laborers or street vendors, advocates say. Others get jobs using falsified documents, including many teenagers who came into the country as unaccompanied minors.
  • Still, many migrants miss the year-long window to apply for asylum — a process that can cost thousands of dollars — leaving them with few pathways to work authorization, advocates say. Those who can’t apply for asylum often end up working without official permission in low-wage industries where they are susceptible to exploitation.
Javier E

Europe Has a New Economic Engine: American Tourists - WSJ - 0 views

  • the Mediterranean rush is turning Europe’s recent economic history on its head. In the 2010s, Germany and other manufacturing-heavy economies helped drag the continent out of its debt crisis thanks to strong exports of cars and capital goods, especially to China.
  • Today, Italy, Spain, Greece and Portugal contribute between a quarter and half of the bloc’s annual growth. 
  • While Germany’s economy is flatlining, Spain is Europe’s fastest-growing big economy. Nearly three-quarters of the country’s recent growth and one in four new jobs are linked to tourism
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  • In Greece, an unlikely economic star since the pandemic, as many as 44% of all jobs are connected to tourism. 
  • Can Europe’s emerging “museum economy” support sustained wealth creation and the expansive welfare systems Europeans have become accustomed to since the end of World War II? And what happens if the dollar falls and the tourists leave?
  • Rent and other living expenses are rising in hot spots, making it harder for many locals to make ends meet. A heightened focus on tourism, which turns a quick profit but remains a low-productivity activity, tethers these economies to a highly cyclical industry
  • It also risks keeping workers and capital from more profitable areas, like tech and high-end manufacturing. 
  • some economists, residents and politicians are concerned about the boom’s long-term implications.
  • “It is literally, for Americans right now, the place to go,”
  • The strong dollar—and a powerful post-Covid recovery—has empowered millions of Americans who would have vacationed in the U.S. before the pandemic. They are now finding they can afford a lavish European holiday.
  • One reason is the brutal sovereign debt crisis that hit the continent’s south especially hard just over a decade ago. Unable to stimulate demand with public spending or to energize exports by devaluing their currency—the euro, which is shared by 20 states—those countries could only boost their competitiveness by lowering wages.
  • “Your dollar goes a lot further,” Cross said over coffee in the lobby of her five-star hotel. “You don’t feel you’re scrounging as much.”
  • Tourism now generates one-fifth of economic output in Lisbon and supports one in four jobs. That boom has reverberated far beyond the capital.
  • Portugal’s gross domestic product grew nearly 8% between 2019 and 2024, compared with less than 1% for Germany,
  • The government recorded a rare 1.2% of GDP budget surplus last year, and its debt-to-GDP ratio is expected to fall to 95% this year, the lowest since 2009
  • Portugal’s population is growing again after years of decline, thanks in part to an influx of migrant workers and to various tax incentives and investor visas that have attracted high-income workers. 
  • Moedas, Lisbon’s mayor, says there’s room for further growth. For a city that doubles in size to around one million every day, including commuters, only around 35,000 are tourists, he said. “We are very far from a situation of so-called overtourism.”
  • The trend is part of a global readjustment following the Covid-19 lockdowns. Spending on travel and hospitality worldwide grew roughly seven times faster than the global economy over the past two years, according to Oxford Economics. That pattern is expected to continue for the next decade, though to a lesser degree.
  • Europe, especially southern Europe, has benefited more than many other regions. Though it is home to just 5% of the world’s population, the European Union received around one-third of all international tourist dollars—more than half a trillion dollars—last year. This is up roughly threefold over two decades, and compares with about $150 billion for the U.S., where tourism has been slower to rebound.
  • In Portugal, a country of 10 million that juts out into the North Atlantic from Spain, Americans recently surpassed Spaniards as the biggest group of foreign tourists. 
  • This and a real estate collapse that left hundreds of thousands of workers suddenly available made the region’s tourist industry ultracompetitive, much cheaper than Caribbean beach destinations and on a par with Latin American destinations like Mexico. 
  • Once an owner of TAP, Neeleman increased the number of direct flights to the U.S. eightfold between 2015 and 2020, adding major hubs such as JFK and Boston Logan, betting that would open up an untapped market. As bookings soared, other U.S. airlines followed. 
  • “It was actually comical, because I went from knowing no one who had been to Portugal to everyone telling me they were going to Portugal,”
  • For Gonçalo Hall, a 36-year-old tech worker, the influx of foreign cash that has transformed Lisbon has been overwhelmingly beneficial for the city. When he lived in the capital 15 years ago, he wouldn’t walk in the historic downtown after 8 p.m. It was “full of homeless people, not safe. Lots of empty and abandoned buildings,” he said. 
  • “The quality of life in Lisbon doesn’t match the prices. Even expats are leaving,” said Hall, who moved to the Atlantic island of Madeira during the pandemic and continues to work remotely.  
  • The average Portuguese employee earns around €1,000 a month after tax, or around $1,100 a month, and only 2% earn more than €2,000. A one-bedroom apartment in Lisbon can easily cost more than €500,000 to buy, or over €1,200 a month to rent. Rents in nearby cities are also climbing as people leave the capital, squeezed out as lucrative short-term rentals transform the housing market. 
  • Jessica Ribeiro, a 35-year-old sociologist, pays around €490 a month for an apartment that she shares with her ex-husband in a town close to Lisbon. Neither can afford to leave. Both make a little more than the minimum wage of €820 a month, and soaring rents mean it is impossible to find an apartment in the neighborhood for less than €700, Ribeiro said. 
  • “The harm that tourism has brought is infinitely bigger than the benefits,” Ribeiro said. “It sends people away from their place of work, making their lives much harder.” 
  • A frequent complaint from residents and housing advocates is that some of the boom’s biggest winners are American companies, from Airbnb to Uber, which often pay little tax in the places where they do most of their business.
  • Lisbon is cracking down on Airbnbs and increasing taxes on tourists, doubling the nightly city tax from €2 to €4, which should raise €80 million a year. Airbnb has paid Lisbon and Porto, Portugal’s two biggest cities, more than €63 million after entering into voluntary tax collection agreements with local officials. Moedas said he is considering “a bit more regulation” of the city’s many Ubers, whose drivers he said don’t always respect traffic rules. 
  • Around nine in 10 Airbnb hosts in Portugal rent their family home and almost half say the extra income helps them afford to stay in their homes, according to a spokesperson for the company. “Guests using our platform account for just 10% of total nights booked in Portugal, and we follow the rules and only allow listings that are registered with local authorities,”
  • Higher rents are forcing many businesses and cultural and social spaces catering to locals to close, according to Silva. “This is not an economy that is serving the needs of the majority of people,” she said.
  • Signs of discontent are bubbling up across the region. Tens of thousands of local residents marched in Spain’s Balearic and Canary islands in recent months to protest mass tourism and overcrowding. On Mallorca, activists have put up fake signs at some popular beaches warning in English of the risk of falling rocks or dangerous jellyfish to deter tourists, according to social-media posts.
  • Serving foreigners is difficult to scale up and is more exposed to economic headwinds. Like the discovery of oil, southern Europe’s new focus on tourism can crowd out higher-value activities by hogging capital and workers, a phenomenon some economists have dubbed the “beach disease.”
  • “Portugal isn’t an industrialized country. It’s just the playground of the EU,” said Priscila Valadão, a 43-year-old administrative assistant in Lisbon. She makes €905 a month and rents a room from a friend for €250 a month. “The type of jobs being offered…are restricted to a type of activity that really doesn’t enrich the country,”
  • For Europe’s policymakers, having people open hotels or restaurants is easier than incentivizing them to build up advanced manufacturing, which is capital intensive and takes a long time to pay off, said Marcos Carias, an economist with French insurer Coface. 
  • “Tourism is the easy way out,” Carias said. “What is the incentive to look for ingenuity and go through the pain of creating new economic value if tourism works as a short-term solution?”
  • Proponents say tourism attracts capital to poor regions, and can serve as a base to build a more diversified economy. Lisbon’s Moedas said he is trying to leverage the influx of foreign visitors to build up sectors such as culture and technology, including by developing conferences and cultural events. 
  • “Some extreme left parties basically say we need to reduce tourism,” Moedas said, but that is the wrong approach. “What we have to do is to increase other sectors like innovation, technology…. We should still invest in tourism, but we should go up the ladder.”
  • While Dias, the hotel owner, is diversifying into nightlife, he refuses to envisage a future where the sector would have to rely heavily on visitors from elsewhere.
  • More than one-third of highly qualified Portuguese students leave the country after graduating,
  • Even higher-paid technology workers have started decamping to cheaper places. 
  • Tiago Araújo, chief executive of tourism tech startup HiJiffy, has held on to his employees but says many of them have been moving out of Lisbon. The trend, which started during Covid, is now being primarily driven by the housing crisis.
  • In Athens, Mayor Haris Doukas says he is working on extending the tourist season, increasing the average length of stay and promoting specific types of tourism, such as organizing conferences and business meetings, to attract visitors with higher purchasing power. He’s also called for new taxes to help the city accommodate the millions of additional tourists thronging to the ancient capital.
  • If Americans stop coming to Lisbon, he said, “I don’t think we can charge this kind of [price] because we will have to go to Europeans, and the Europeans, they don’t have money.”
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