00:09:02 · Casey Handmer
[00:09:02] S1: Well, I did I did tweet about this the other day. It's very frustrating to me. Now it is the case that, in general, if you if you murder someone, you go away for a long time. But, you know, the newspaper writers and so on love the outrageous headline where they find, you know, some bizarre confluence of factors that results in in in a murderer being released early or not even getting convicted or whatever. That's fine. You know? Everyone deserves a day in court. Yeah. I prefer to live in a in a world where where justice is imperfect, but, you know, innocent people stay free kind of thing. But on the other hand, the the presumption behind, like, giant projects that are building or maintaining infrastructure for the public good is that it's going to result in a environmental impact with unbounded downside. I can imagine a process that could do that, but it'd be pretty hard work, actually. And and and and just the de facto, like, way that this has kind of worked worked its way through the system over the last fifty years, mostly with regulations, it's not even in the statute, is that if you wanna do anything at all at large scale in California, but also much of the rest of the country, you have to go through this, like, debilitating process that that takes so long and costs so much money and has so many handouts to everyone involved that the... You don't... It's not just that, like, the the project doesn't pencil on paper uniterally, but the sorts of people you need to run these sorts of projects are just not interested. Right? Like, who's gonna sit around in fifteen years waiting for permission to fix some basic thing in their backyard? It's ridiculous. Yeah. So it's just like... I just kind of had Grok run the numbers for me on, like... You know, in terms of, like, the value of statistical life, what is the the net loss to our society for, you know, California's inability to repair the California Aqueduct, which has been... I think, nominally, it... It's... Can transport, like, four and a half million acre feet a year of water to LA from the Sacramento River Delta. But its actual capacity is, like, maybe 50% of that because a couple 100 miles in the southern section have subsided due to groundwater extraction over the last thirty, forty years. And, obviously, it's like... You know, between pumping stations, it's meant to be pretty flat.
00:11:03 · Casey Handmer
And so if section subsides, it will overflow if it's too full. Well, there's not rocket science. Bulldozer concrete done. Okay? And and we know that, you know, when a bit of the freeway falls down or something, we can fix it in a week or two. Like, that capacity does exist. And so instead, we live in this insane situation where the farmers haven't got enough water and Southern California doesn't have enough water and infrastructure already exists in a corridor where it's already been built, where the environmental disturbance has already taken place, and just the process of getting permission to, like, send out, you know, a local road repair crew with a bulldozer and and cement to, like, make this canal work at its design capacity, thus solving everyone's problems. The, like, fix everything easily button is, like, ten years and billions of dollars. Right? So coming back to the value of statistical life, the the economic value that's lost as a result of this of this kind of clot just with this one example is roughly equivalent to 10,000 lives. Right? So if you're, like, I don't know, scrolling on on on TikTok and you run some kid over, that's vehicular manslaughter. And if you're unlucky and you have a bad lawyer, you'll probably go to prison for a while. But, like, you'll get out of prison, and that project will still be in, like, the other... The approval agency hasn't even looked at it yet. Purgatory. Right? And and in that meantime, that one year, like, equivalent to a thousand statistical lives have been have been lost completely just due to our inability to fix it. It drives me crazy. It drives me absolutely crazy. We know we can move extremely fast, and we also know that the key to delivering, like, really cost effective, high value infrastructure at scale for people that benefits everyone is super progressive because it benefits poor people way more than it benefits rich people. Rich people will be able to afford services no matter Rich people are not running out of water. It it it it only harms the poor people when these things fall apart, really, is to move really quickly because because then your labor cost, you know, is less because, you know, you're getting more stuff done in a given unit of time. This is how we built ships really quickly in World War two. It's how we built aircraft, you know, the plants to cross the road here in World War two.
00:13:06 · Casey Handmer, Ty Morse
Just, like, reduced the number of labor hours per unit by a factor of 10 and, and actually increased output by, like, a factor of 50. So so labor did well as well. Everyone got more, basically, just for for moving quickly. But but these days, it's... It seems insane. Like, it's it's essentially impossible to get to get the green light to do it. I mean, this was starting to happen in the fifties, and and Henry Kaiser was was the the entrepreneur who who did the hoop... The the Hoover Dam and a few other things and did the Liberty Ships in Richmond. And he wanted to build an estate up in Lake Tahoe. And he was older by that point. He didn't wanna screw around. So he just had his construction crew up there and build it twenty four hours a day under lights, including six feet of fill and, like, multiple structures and a dock and and a place for his speedboats and and, you know, a couple of large houses and house for guests for staff and so on. And he managed to complete the project before an injunction was able to be filed. Right? Did the whole thing in twenty two days. Right? That's insane. Like, Altadena burned down, what, almost two years ago, twenty months ago. And just now house built? Yes. There are a few now. [00:14:09] S0: There's few. [00:14:10] S1: There are a few now. A year ago, nothing. Now there's been a few houses built, but, you know, they lost 10,000 structures. They'll be, at the current rate, still rebuilding by the time the next fire goes through in twenty years. So, man, there was a housing crisis. Anyway
00:14:10 · Casey Handmer, Ty Morse
[00:14:10] S1: There are a few now. A year ago, nothing. Now there's been a few houses built, but, you know, they lost 10,000 structures. They'll be, at the current rate, still rebuilding by the time the next fire goes through in twenty years. So, man, there was a housing crisis. Anyway [00:14:26] S0: At the same time that it's, like, effectively becoming illegal to build large megaprojects, you have Elon turn around and say, actually, we're gonna build the biggest building in the world by, like, maybe double or something in the form of Terraform. [00:14:39] S1: Oh, Terraform. Yeah. [00:14:40] S0: In Texas. So how does... If if you had to, like, think about how he's thinking about that project, he's both saying, like, it's impossibly difficult to get this stuff through, and yet I'm gonna do it anyway. [00:14:51] S1: In the next in the next five years. It may be the case that that he gets the green light to, like, begin part of it sooner because of, like, national national security imperatives, in particular, like, onshoring of of chip production. But, yeah, if he just went through the same lane as everyone else has to go through, like, even in Texas, you would get you'd get stuck with a project of that scale. [00:15:10] S0: Why do you think that he thinks that he's able to pull this off?
00:15:13 · Casey Handmer
[00:15:13] S1: Well, he's done it many times at this point, but also, like, he knows the numbers to call to say, like, hey. Do you want chips, do you wanna lose the next war to China? Right? And it it actually helps to be on the critical path for national security at a certain scale. And and, you know, in in in those cases, you can you can sometimes cut some corners, but but, you know, the the the reality is that most of US economic growth is not happening by, like, one or two people. Right? It's it's tens of thousands of of small businesses that are growing gradually like miners that are providing mentorship and opportunities for people to to, like, build their build their skills and and level up and good pay and local housing and and tax revenue for the local cities and all the rest. And, I mean, I... Actually, I re... Re listened to our our interview this morning on my way to work, just so I'd be, you know, up to the moment. And a year ago, I said, we're in this castle, and we're gonna gradually expand through this entire neighborhood until we're up to the freeway, which would be... There's probably 500,000 square feet or something. Maybe maybe a million square feet between here and freeway, plenty, basically, over the next five, ten, fifteen years. I like it. The city likes us. We get on well. We like the local fire brigade. It's convenient. All the people already live nearby. There's local residential areas. It's it's a great place to build. Okay? But but it turns out that even here in, like, heavy industrially zoned Burbank, there are enough restrictions that basically make it impossible for us to expand here. We're gonna have to move into, like, down the road, like, miles and miles into another another industrial area that's larger. I can give you some examples. The... All the buildings east of here, they're, like, a few blocks east of here, were redeveloped in the nineties. And even though it's it's heavy industrially zoned land, they were built as light industrial. And so even though the city will permit heavy industrial use, the building owner won't. So they're just gonna have like city block full of vacant studios because all the studio business has left Burbank, generating zero income or tax revenue for the city for you know, as long as the landlord can afford to be patient, I guess, decades. That's just as an example. You know?
00:17:12 · Casey Handmer
And and then meanwhile, just top the road here, we have some of the last anodizing plants in California because it's now illegal to do metal metal refining in California of any kind. You can't even build, like, PCB, like, printed circuit board traces here. San Dimico is very good on this. And so you got these legacy shops that are, like, a 100 years old and, like, ridiculously bad for the environment and for people who work in them. And... But they grandfathered in, and they'll they'll never shut them down. Because once they do, that's it. They'll have to go they'll have to go to Texas Texas or Louisiana to do this work. So this neighborhood and this whole city was once like a global center of aircraft manufacturing. They built maybe a 100,000 aircraft here in World War two, and it's it's pretty much all gone. It's desolate. It's... I mean, there's still businesses occurring here. LA is still a vibrant and economically dynamic place, but it's not like it was. And it's no longer a center of manufacturing. And second year manufacturing is is massively underrated for its importance. I think it's like the single biggest, like, value increase. Right? So the purpose of a business is to, like, consume inputs where they're cheaper, then produce outputs and sell them where they're expensive or market them where they're where they're valuable, and thus generate value. And second year manufacturing takes in commodified input, you know, materials like aluminum or whatever for air... Airplane manufacturing, and then does a series of operations on it with extremely sophisticated machine tools. Our neighbors across the road here do aircraft hinges, and they're the only, as far as I know, the only certified aircraft hinge manufacturer in all of NATO. So all of Airbus and all of Boeing and all of the military people and their maintainers and everyone else for the hinges that, like, allow flaps and stuff on the wings to work, they get them done here. Right? That's... It's bizarre. Right? But these are just like, you know, all these all these old all these old places here. They're kind of... The original proprietors are aging out now, and and they were part of the satellite kind of industrial complex that served the Lockheed plant, which is now an Amazon fulfillment center until the mid nineties.