This Is How We'll Know If the CHIPS Act Is Working

Tracy Alloway (0:05)

Hello there, Odd Lots listeners. You are about to hear a live episode recording of the Odd Lots podcast.

Joe Weisenthal (0:12)

Yep, this episode was recorded in front of a live audience at the Decades Bowling Alley in Lancaster, Pennsylvania. We hope you enjoyed the show.

Tracy Alloway (0:21)

Hello, and welcome to another episode of the Odd Lots podcast. I'm Tracy Alloway.

So Joe, we can't seem to get away from semiconductors.

Joe Weisenthal (0:31)

No, we can't. And you know, we recently talked to two of the people basically running the CHIPS Act in a recent episode.

But I think if we're gonna ask the question like how the CHIPS Act is going, we can't just talk to the people running it.

Adam Ozimek (0:45)

No.

Joe Weisenthal (0:45)

We'd be biased.

Tracy Alloway (0:46)

You think?

No, we need some outside perspective. And I'm very happy to say that in this very special episode of Odd Lots, which we are recording live at the Decades Bowling Alley, we are going to be speaking to two of the perfect guests. We are going to be speaking to Dan Wang, visiting scholar at Yale Law School's Tsai China Center and tech analyst over at Gavekal Dragonomics, perhaps the only man who's ever read a full copy of the Chinese Communist Party's internal policy journal from cover to cover.

Dan Wang (1:19)

It's called Seeking Truth.

Tracy Alloway (1:22)

And special guest, a last minute addition, just to keep our producers and our tech audio people on their toes. We're also going to have Adam Ozimek. He is of course, Chief Economist at Economic Innovation Group and also our host for this wonderful event. So thank you both so much for coming on Odd Lots.

Without further ado, Dan, you recently moved back to the US and now you're in Lancaster at a bowling alley. Isn't it great that we're all here?

Dan Wang (1:49)

No one is more surprised than me, Tracy, that we've all gotten over here. If I could heighten the surrealness of the moment just a little bit, I want to point out that my parents are also here in the back who sloved over from their home in suburban Philadelphia.

They are shy. I hope we can involve them in the bowling.

Joe Weisenthal (2:13)

Adam, are you surprised to be an economist who owns a bowling alley and to issue your own tokens?

Adam Ozimek (2:19)

I'm a little used to it at this point, but I enjoy being an economist who issues my own tokens.

Joe Weisenthal (2:25)

That's fair enough.

Tracy Alloway (2:26)

So maybe just to set the scene, I mean, Joe and I started talking about semiconductors years ago now because of supply chain shortages, which we've since gone on to explore in various ways. But in the years that have passed since, semiconductors have become like a huge policy point.

Why is this of interest in particular to someone like Adam? Why does this interest you?

Adam Ozimek (2:51)

Well, it's part of a broader discussion around industrial policy. And I think that if we're going to be trying to pick specific industries, that we want to grow.

I put myself in the camp of I think this is possible, but we have to do it very smartly. It's not easy. And so my interest in the discussion is trying to make sure we're doing this the right way to maximize the odds of success. A lot of times, you find two camps. There's the critics of industrial policy who just say, it can't work, it's impossible. There's public choice problems, it's doomed. And then you sort of have another side that's just like, as long as we're spending the money, we're already mission accomplished. They might not say that, but that's kind of how they act sometimes. Sorry, guys.

But I think we need to be critics who think it can succeed in trying to make it succeed by being critical and ensuring that it's done smartly.

Joe Weisenthal (3:48)

So, you know, one of the things, the first time we ever did a COVID-related episode, it was actually with Dan.

And I think it was before we knew like quite how much it was going to change the world. And it was like a very specific, like, well, what's COVID going to do to like essentially electronics manufacturing in China? And that was like the extent to which we were thinking. I think it was like February 2020

Obviously, then we, you know, the world changed. We don't need to go over all of those things. But let's just start with like this simple point. When it comes to, from your perspective, can it succeed? Not like the specifics of the Chips Act, the Ed or whatever. But do you accept the premise that the attempt to turn around domestic manufacturing of high-end semiconductors in the US is conceivably possible?