Thread by @QuixoticQuant

This Decouple pod with @JigarShahDC is 🤯. I've never been so relieved to finally understand what's going on with US nuclear, and shocked/appalled at how much of it comes down to the attitudes and delusions of one man

Quick thread on 'Jigarnomics'. 1/

Jigar is seized with the importance of 'capitalism'. So American.
But Jigar's capitalism is completely weird.

The state invents the deep tech.
The private sector scales it.
With an even-handed shower of subsidies from above because... that's what makes Jigar's garden grow. 2/

He spits on the success of countries like Korea, France, Russia with (relatively) thriving nuclear exports, because large, vertically-integrated state sponsored enterprises. Dangerously non-capitalist.

Extremely agitated by the Barakah example. 3/

But most bizarre, is when pressed to describe his vision for how US-style, free-est market capitalism can and will work better, he proudly exclaims that he doesn't have one!

US capitalism simply must triumph! Articulate a plan for how? Never. That's basically communism. 4/

The strangest thing about Jigarnomics is that he's so far from classic small-gov ideals. He relishes certain cases for gov involvement in shaping/influencing markets, and technology.

He basically claims the private sector is incapable of deep-tech innovation. 5/

And he has no hesitation justifying the role of the Loans Program Office, which he directs. For some reason, the private market doesn't give certain sectors a 'fair shake'. Gov can and should step in to fix that. 6/

But he seems vehement, fixated on the idea that no underlying logic, design, or plan could be involved in guiding that investment.

It has to be an agnostic shower of subsidies. Guided by nothing but the 76-step application process. First come first serve. 7/

The intellectual missing link is identifying why certain industries/objectives can't be done well by private markets alone.

Not Jigar's jam apparently.

He even thinks solar and nuclear builds are just as hard. Won't distinguish between them at all. 8/

To have sensible,involvement of the state, I think it's essential to have a clear idea about the 'market-failure' you're trying to address.

For me, massive infrastructure projects can/do have returns to scale, concentration, natural monopolies etc that justify intervention. 9/

I work a few blocks away from this bridge. Built in the 20s when 🇦🇺's population was a tenth today's.

The market couldn't do this. We'd end up with a hundred little cable ferries, half dozen different smaller causeways maybe. A tangle of road-connections. No ships. 10/

It's just freaking obvious that with infrastructure, having a plan and opinion about how much you need, and where it should go, is essential. And often the right size is too big for the market.

So the state steps up. 11/

This is actually more true, in energy, including renewables, than many people are willing to admit.

The big, core, trunk infrastructure is essentially centrally planned. Regulated monopolies. A vision/idea/policy at least about how much and where. 12/

But Jigar is glowing with pride about how much he's berated the nuclear industry in the past few years for being too pessimistic, too passive, in asking for government leadership.

He's 'slapped them silly' to get them to wake up. 13/

He's also the school-teacher in the yard, and has told the children to stop squabbling. Bad-mouthing each other's technology.

He knows that actually we need as much of everything as possible. No 'optimal mix' required. Only open-throttled tech-agnostic subsidy showers. 14/

Ultimately, he shows his hand pretty clearly in terms of what he think is wrong with nuclear.

He thinks the designs are awesome. USA all the way. It's just not taking off because the industry hasn't figured out how to make it 'scale'. 15/

His poster-child here is @elonmusk with Tesla and Space-X.

Batteries and motors were always there, Tesla figured out out how to package them in a fast car.

The US government figured out rockets. Now Space-X has made it cheap.

This is the Jigarnomics formula for nuclear. 16/

@elonmusk It's also clear that he thinks his financial-model for selling solar-as-a-service is relevant experience.

So I think it's clear why the US nuclear industry, brow-beaten by Jigar, has come up with 'SMRs' as the magic-fix-for everything.

17/

@elonmusk They're attempting what Elon did with electric cars.

Focus on one critical, perceived weakness, and fix it.

It's fine for a car to be 3X the price, 2X the weight, 1/2 the range... IF and only if...
You paint it red, make it look fast to the eye, feel fast under foot. 18/

@elonmusk And in the nuclear industy, that means coming up with a story about making a reactor that is...

Financeable.

That's basically it. (The faster safer stuff is mostly BS)

It's a finance-above-economics-above-engineering mentality to nuclear. 19/

@elonmusk And basically because of this narrow, almost consumer-goods oriented view that 'capitalist' scalability means prioritising 'financeability' above every other economy of scale, concentration, etc, we have SMRs.

Meant to be the Tesla Roadster of nuclear. 20/

@elonmusk Now I'm even more angry about how this single-minded obsession with SMR's has hijacked the debate about nuclear in Aus. And maybe thrown it off-course.
Jigarnomics.
Subsidies all round. But not to address any underlying market failure, in a strategic, directed way...
21/

@elonmusk Not to achieve an objective of national significance... (Dunno... decarbonisation?) Like the space race, or Manhattan project, that gave birth to things like rockets and nuclear power.

Just in the "whoever steps through these 76 steps of a grant process wins" kinda way. 22/

@elonmusk Thus the directed, purposeful, state-led efforts that discovered nuclear technology are scoffed and mocked as unsuitable to 'scale' up energy infrastructure, which has a natural obvious case for state leadership by its nature. Because be like Tesla.

Jigarnomics. 🤯 23/23