Quantumfreakonomics
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Quantumfreakonomics
16hr ago
There is a great new Substack article about the populist backlash to AI data centers by Jasmine Sun. She also did an interview with Ezra Klein for those of you who like audio content.
I like the article because Sun speaks fluent Silicon Valleyish while also taking the time and effort to visit and talk to the people on the ground in the rural Midwest instead of condecending at them from the coasts. She asks an important question: why precisely do people hate data centers so much?
Looking only at the statistics, AI land use and water use issues are fake. Nowhere is running out of land, and nowhere (West of San Antonio at least) is running out of water. Are the people in these communities stupid? Do they not know how to shut up and multiply?
It turns out that a lot of the fear and anger stems from a combination of distrust and PTSD from deindustrialization. An interesting example is Janesville, Wisconsin, a town with a giant concrete slab in the middle of it where the GM plant used to be.
“Small communities don’t have the legal budget to negotiate well. You’ll never hold a company to a contract,” said Cathy, who feared Janesville once again tying itself to a single big employer—especially one in a “high-risk industry” like AI. City officials were promising to lower wheel and property taxes on residents, but that assumes everything goes right. What if the project gets abandoned? How does Janesville avoid “another GM plant scenario”?
Fascinating. The collapse of the auto industry in 2008 was apparently so bad that it is better to prevent industrial development alltogether in order to avoid the risk of another collapse. It almost makes sense until you think about it for 30 seconds.
"I ask the three what they envision being built here instead, but don’t get much of an answer. I suspect that Adam is partly right—maybe this is a choice between a hyperscale data center and a concrete slab. And Alyssa, Cathy, and Kaycee would rather pick the slab."
Some of the objections Sun hears in other towns fare a bit better.
In 2017, the Village of Mount Pleasant, Racine County, and State of Wisconsin offered over $4 billion in tax incentives and infrastructure investments to win a bidding war for a Foxconn plant. In return, Foxconn promised Mount Pleasant—population 26,000—a $10 billion investment that would create 13,000 jobs making flat-screen TVs. The village eminent domained the land and prepared infrastructure. But Foxconn kept downsizing their plans, citing high labor costs. By the end of 2024, just over a thousand jobs had been created. Mount Pleasant was saddled with over $183 million in debt that Foxconn and Microsoft are still servicing.
The memory of the Foxconn fiasco is still raw. We heard it referenced in conversation after conversation as a flaming symbol of corporate failure.
This is the steelman of the anti-data center position. People are worried that the big companies proposing data centers are going to Foxconn them and not deliver the supposed benefits.
My conversations make me wonder if the technical content of data center deals is mostly beside the point. Closed-loop cooling systems? “I don’t believe them.” Paying millions in taxes? “I don’t believe them.” Creating a thousand jobs? “I don’t believe them.” I hear a reflexive skepticism of every claim.
Rather, the way that AI companies engage with communities—forcing NDAs, dangling billion-dollar promises, pushing environmental externalities far away from AI’s wealthy user base—resembles a classic story about dark money in politics. Your politicians are being bought by billionaires and gigantic corporations to screw you over. It’s not Skynet: it’s the oligarchy.
One of the things that comes across especially clear in the Ezra Klein interview is just how unprepared the AI companies were for the backlash. They didn't realize how sketchy it comes across to insist on NDAs with local officials when negotiating deals. They thought, as a straightforward application of Coase's Theorem would tell you, that any bumps in the road could be ironed out by handing over a big bag of money. It turns out that people don't work that way. It feels like a bribe, and Americans do not like being bribed.
Quantumfreakonomics
22hr ago
Now this is a real question: is it ethical to shoplift from Whole Foods to collect on a debt if Amazon owes you money and refuses to pay?
Quantumfreakonomics
23hr ago
It will be interesting to see if the Mamdani administration prefers shortages, or if they prefer lines. Each way has its pros and cons.
Quantumfreakonomics
1d ago
Dragonball Z was instrumental in teaching kids how the real world works. The guy who beat everyone up gets best girl, the autist is stuck with his childhood sweetheart, the short guy has to marry a robot, and the old guy that owns his own island is a giant perv.
Quantumfreakonomics
3d ago
I also noticed this surprisingly major border dispute a few years ago. Growing up in the United States, this was never mentioned in school. Occasionally we had maps with a dotted line through Morocco and small-font text that said "Western Sahara", but this was never remarked on in class.
Quantumfreakonomics
4d ago
What is the economic case for private equity getting involved in established sports leagues? Does FIFA need capital?
Quantumfreakonomics
5d ago
”The idea that they would care about the cavitation effects of a nautical propeller but not about the interaction between humans and bullets seems absurd.”
It is entirely reasonable to prioritize propeller cavitation research over rifle ballistics. Everyone knows how rifles work. You point them at the enemy, pull the trigger, and then they die. If your nation’s ballistic missile submarines don’t have anti-cavitation propellers, then you don’t have a resilient second-strike retaliatory force to maintain strategic deterrence.
Quantumfreakonomics
5d ago
I suppose educational cost disease and more efficient social sorting have crippled the private disciplinary institution industry. I had completely forgotten about the existence of “military school” since the time my parents jokingly threatened to send me to one. I assumed OP was talking about the service academies.
This was a three-person race not too long ago. Mallory McMorrow was the best candidate on paper. Every neoliberal Twitter poaster loved her, but her campaign was done in by a series of forced and unforced errors, most revealing of which was the discovery that she doesn’t actually like Michigan, preferring New York or California (shocker).
I’m not convinced that Stevens would do better in November than El Sayed. A lot of people in Dearborn simply would not vote for such an openly pro-Israel candidate.
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