Money Talks: Touring America’s industrial revival

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The Economist.

Look, the bill I'm about to sign.

Is not just a bill about today, it's about tomorrow.

It's about delivering progress and prosperity to American families.

In August 2022, Joe Biden, America's president, signed a landmark piece of legislation into law, the Inflation Reduction act, or ira.

To take the most aggressive action ever, ever, ever, ever in confronting the climate crisis.

It promised a massive $370 billion of government funds for green infrastructure and industry, including tax credits for Americans on solar panels and electric vehicles made in the country. All part of a strategy to reboot domestic production and create jobs.

Tens of thousands of good paying jobs. Clean energy manufacturing jobs, solar factories in the Midwest and the south, wind farms across the plains and off our shores.

Clean hydrogen projects and more all across America.

In the years since Biden put pen to paper on the ira, there has been a surge in manufacturing construction across the country. Companies are breaking ground on multibillion dollar projects building factories that will eventually churn out electric vehicles and batteries.

Just last week, the Japanese carmaker Toyota announced it was upping its investment in a brand new EV plant in North Carolina.

Toyota's total investment in the site will now be $13.9 billion by 2030, which should create 5,000 new jobs. The company's regional president is rather excited.

You don't get charged about that.

Bad battery puns aside, it's all been portrayed in the Biden administration as a watershed moment for US Manufacturing, especially in America's southern states, which have attracted a huge amount of new investment.

But the success of President Biden's policy objectives hinges on what actually plays out on the ground.

So to find out what's happening, our colleague Henry Tricks decided to take a road trip across America to visit some of the places that hope to be part of a great industrial revival.

So I'm not sure if I gave you the background yesterday, but yeah, we're on this trip around America partly with the aim of seeing how America's industrial landscape is changing. Changing?

Oh, it's definitely changing.

You're listening to Money Talks from the Economist, our weekly podcast on the markets, the economy and the world of business. In Washington, D.C. i'm Alice Fulwood.

In London, I'm Tom Lee Devlin.

Also in London, I'M Henry Tricks, and.

In today's show, we take in the view from the passenger seat on a classic road trip through new industrial America.

First we hear why this shock and awe investment in zero carbon energy got me so fired up that I just had to hit the road.

Then we hear how new factories and the promise of new jobs are expected to transform America's industrial landscape.

That's one of the attractions of this economic development opportunity was the level of wages that were being offered by Panasonic.

And finally, even if President Biden's strategy works, will it translate into the political gains he might be hoping for?

Would you credit the Biden administration and the Inflation Reduction Act?

I would not, but that's my personal view.

Hi, Tom. And hello. And a big welcome to Henry.

Yes, hello. Welcome to the great Henry Tricks.

Hi. Thanks so much. I'm delighted to be here.

So, for those of you who are not familiar, Henry is the Economist Schumpeter columnist, and he's here to keep Mike's seat warm while he's away on holiday. And we're in very safe hands because Henry's been at the economist for 17 years. He's also had a pretty good time of it, I think, covering different beats all over the world.

I think what you're trying to say, Alice, in keeping with the road trip analogy, is that I have rather a lot of miles on the clock, unlike you two, who with Mike are obviously shiny fresh models roaring ahead with money talks.

And Henry, now you're based in sunny California from where you write your column. How does that compare to all your previous gigs with the Economist?

Well, certainly compared with gloomy London at this time of year, it's an absolute joy. And there is something about the west coast of America that hums with entrepreneurial zeal. So it's a really exciting place to cover business stories from.

We've brought you onto the show today mostly because you've got something a bit special to share with us. As we've mentioned, you've just been on your version of the classic American road trip, which I think was technically a holiday, but I hear you took some notes and made some recordings along the way.

Sure I did, Yeah. I traveled 5,000 miles through 15 states, including some amazing cities like Denver, Kansas City, Detroit, Nashville, Memphis. All cities I'd never been to. And I ended up on the southern border between Texas and Mexico. Yeah, it was a two week road trip and we covered a lot of ground.

And I understand you took your son and nephew with you as well.

So how was that Perhaps I could say they took me, Santiago and Walter. We had to share the driving because it's a long way and we had different objectives with the trip. So I was going there to look at this kind of reshaping of the car industry. They were interested in the music industry and I was exposed to a lot of rap and techno music in the car.

So why did you do the trip? What were you hoping to see?

Well, of course, when you do a road trip, the first thing on your mind is seeing the incredible American landscape. But I also was really curious to explore what is left of America's industrial heartland in 2022. As we've mentioned, the Biden administration signed off on some really big investment packages supported with government money, tax credits, et cetera. One of them was the Inflation Reduction act, which is geared towards clean energy, electric vehicles, battery plants, some support for hydrogen, and then there was the so called CHIPS act, which is aiming to support the building of massive semiconductor foundries in different parts of America. Big package of support from the Biden administration and I wanted to see what it was doing on the ground.

So we're going to hear some of your journey in just a minute. But before we get to that, what was most striking to you as you left the city limits of Los Angeles?

Well, the amazing thing about when you're in Los Angeles is that you think the entire world drives electric vehicles. I have one too. The moment that you sort of get out onto the highway, what's really striking is how rare it is actually to see a Tesla or anything else. And also very rare to see an EV charging station. The gas stations don't have them. There are obviously some Tesla charging stations around. But I was rather thankful that I left my Kia Niro EV behind and took the trip in my wife's fuel efficient Honda. The other thing is that once we'd kind of got out of the metropolitan area of Los Angeles and started to climb up into the hills, you do see a stunning amount of clean energy infrastructure. You see solar farms, you see vast amounts of wind turbines. So the infrastructure is there, even if the electrification of transport, so to speak, is not. Anyway, from Nevada, we continued northeast into Utah and drove up through the Rocky Mountains and down onto the Colorado plains. And I guess it was here, gazing across to Kansas on the horizon, that we were compelled to stop, to take in a new landscape that just took our breath away. We are in the middle of the most staggering landscape, with rain across the Horizon over about 50 miles in front of us, and clouds and the red sky as the sun goes down over the Rockies is just making for this utterly dramatic scenery. We're standing in the middle of this open plain and suddenly the wind has picked up. And that wind is really significant because in front of us, right across the horizon are just one wind turbine after another. I would say a cluster of hundreds of them dotted across the skyline. And I don't know what it was ever like to see nodding donkeys on the big oil planes. But I have to say that wind turbines as well, these giant wind farms, they conjure up a similar feeling of extraordinary power being generated in the American landscape. As we continue into Kansas, the state's embrace of wind energy stands right before our eyes. Wind provides a bigger share of energy here than in almost any other state. The rural towns we drive through are losing young people who are reluctant to farm. And wind energy is a way to rescue the livelihoods of landowners. But in the Republican dominated state Congress, lawmakers want to restrict wind farms because of light pollution, lights that fill up the sky. As we drive through the Kansas nights.

While Brock's inspiring voice rang out push on your colon.

We're heading to desoto, a quaint town on the Kansas River. The there also happens to be a place where I hope to see Biden's new industrial policy playing out.

DeSoto officials are excited tonight after Panasonic announced that it would be expanding its footprint even more in that city.

DeSoto is the location of a new two story battery factory being built by Panasonic, the Japanese electronics multinational.

And the signs are already there. The Panasonic electric vehicle battery plant is starting to take shape in what used to be an open field.

The project represents the biggest ever investment in Kansas and it's making big news in the area. I want to spend some time here to find out what this means for the locals. First stop, the mayor's office.

Good morning, Rick Walker. I am mayor here in DeSoto, Kansas. I've been mayor for four years almost.

Rick Walker is an engineer by profession. When I emailed him late on a Sunday night from Kansas City saying I wanted to visit, he replied instantly with an invitation to see him at 10am the next morning. In his office, he quickly gets down to business describing DeSoto's industrial past and how it's being revived.

DeSoto was home to the Sunflower Army Ammunition Plant. It opened in 1942 and made gunpowder and rocket propellant during World War II, during Korea, during Vietnam. And we had as many as 15,000 people employed out at that facility. Early 90s, that facility was Declared surplus, closed and those jobs went away.

In late 2021, this abandoned property was annexed into the city and given a new tax status. This would allow any interested company to get tax incentives for redeveloping it.

So when Panasonic came along, it was an economic development opportunity that came down from the state of Kansas. The Department of Commerce had a project that was 4,000 jobs, $4 billion. Just crazy numbers.

What is the jobs and the residential impact on the town going to be?

Some folks will want to come to desoto to live, but largely the workforce that's going to fill the jobs is already within the region. Within a 30 minute drive of that new plant, there are over a million and a half in the workforce. And when you push that out to a 45 minute radius, that grows over 2 million. So we're anticipating some growth and we're preparing for that. We are in our planning process, we have 2,000 multifamily units that are at some stage of approval.

And does the community itself welcome the investment and the influx of people or is there some trepidation, I guess, about the potential?

So generally the people that I speak to, most of the people are cautiously optimistic or outright optimistic that this is going to be good for the community. Then there are certain constituencies that are concerned about, you know, losing the small town feel losing the small town altogether.

Can you talk to me a bit about the industry itself, the battery making, which is going to be a part of the EV revolution? I guess I don't know whether many people around here drive EVs. Where I'm living in LA, we have no shortage of them.

But, you know, I'm sure we don't have as many EVs in, in the area as there are in L A. That is. What's going to be produced here are EV batteries for electric vehicles for the primary customer of Tesla. It's my understanding they will be produced and then shipped to a facility in Texas. I understand there would be other manufacturers that they're going to market these batteries to as well.

So from the town's point of view, what did you offer Panasonic?

So we actually offered it to the developer before we even knew there was Panasonic. It was the creation of this TIF district, tax increment financing district that allows the increased value due to development, the taxes on that increased value to be used for improvements on the property to make it usable again.

So they will pay local taxes, will they?

The amount that they would pay in local taxes is used to pay off costs for improvements that are needed to make the project possible. So instead of paying that directly to a city, they're paying that to retire a, a bond or a loan on money they have upfronted for improvements to the water treatment plan or for the roads or for their site work. Or it can't go to their building, but it can go to anything that's in the ground.

So all the infrastructure around basically supported by that. But on net, will the town benefit fiscally from this investment?

We will benefit as well. That's one of the attractions of this economic development opportunity was the level of wages that were being offered by Panasonic. Starting wages that are in the $25 an hour range with the ability for those to grow. So this could be a career job where you could make a reasonable living, have benefits of vacation and health insurance.

With all this talk of investment and an expanding town, I just had to see the construction site for myself. Rick kindly agreed to take me. We've just driven up from DeSoto where we, we saw eight or nine Caterpillar trucks and diggers building a four lane highway which is coming from the interstate right the way through to this factory. Rick, could you tell us what we're seeing in front of us here by the side of the road?

Sure. You're seeing the steel framing for the north wing of the new Panasonic battery plant here in Desoto. It's a 2.7 million square foot footprint. And this part that they have erected right now is about half of that structure. Steel framing is largely complete. They're already pouring the slab on deck for that second floor in there.

And how many batteries will they churn out of here? Eventually?

So it's over a million a day, I believe.

Wow, that's incredible. We have what, nine cranes here? So talk to us about the impact on the town of having all of this construction taking place.

Now There are about 600 workers out here every day during the completion time. When they have this thing shelled in and are looking at adding the equipment. We're expecting that workforce will grow to, they're saying estimate 5 to 6,000 workers a day will be out here working to bring this project online.

My tour of the construction site over. I took shelter from the wind in the Oasis Cafe, A trendy health bar near one of the new housing developments that are springing up.

Those two buildings right there and then all those houses right there, those have gone up in the last probably four months.

As I was enjoying my weird coffee flavored smoothie out of a packet, I struck up A conversation with the young waitress, Kira Horne. She'd grown up in desoto, so I wanted to know how she viewed the changes happening in her town.

Literally right before Panasonic signed, we were starting to see a drop off of the town because people were going other places for work or people were going other places for school because desoto was so small. And that also there's a lot of business owners and people that live in desoto that were always going other places for work. But now with it booming and the school growing and housing coming in, now everyone is starting to be able to get work in desoto.

Are there people who don't want this?

So my boss, she's also a realtor, so I do also hear from her. The housing market and everything is growing tremendously in DeSoto. Prices are going up, but prices are going up. So a lot of people have been here their whole life are now having trouble trying to sell, stay here. Because with all the housing and the neighborhoods that are going up. Well, it's so expensive now for people to live here that if you don't have one of the big booming business jobs that are in doto or affiliated with it, you probably won't be able to stay.

You might get priced out.

Yes.

Okay, Kira, thank you very much.

I do always get this sort of slightly uneasy feeling whenever I hear politicians talking about things like this. You know, the place based policies and incentives like tax cuts or rebates that are used to lure firms in. Because I think this is probably one of the policy points where economists and politicians are least aligned. Economists, for the most part, don't really care where economic activity is taking place. As long as it's in the sort of most efficient place to produce something. So in general, they tend to be pretty skeptical of incentives that move production around, especially if those incentives are costly. But by definition, almost Politicians are interested only in their place wherever they represent. And so it's a very natural impulse for them to try and encourage new businesses to their area using the sort of tools at their disposal like taxes and incentives. And it can all work out. Sometimes incentives create these clusters which become the most productive place to produce something in their own right. But that doesn't always happen.

Yes, you're absolutely right, Alice. And I think that while I also share some of this skepticism, I was willing to kind of suspend disbelief for a minute just to sort of see what it looked like on the ground.

Yeah, I mean, obviously there's been a huge amount of debate around whether the IRA has been a good use of government money at a time when public debt is soaring. And there's a lot of concern around whether it will spark a global subsidy race. But it's difficult to argue against its effectiveness in doing what it set out to do. So since the law was signed in August last year, monthly manufacturing, construction spending has increased by around two thirds, which is an absolutely incredible jump in such a short period of time. And what's so fascinating about your road trip, Henry, is that you can also see it playing out on the ground and transforming communities in the process.

Yeah, you bet. I mean, it was quite interesting in some of the places we visited, especially in De Soto, the first town that we visited. It really felt like being in China, where the speed of construction was so fast, roads were being torn up in order to create big highways. And this was all being done in the space of a few months rather than years. So it did give you that kind of Chinese sense of industrial policy in action. And the other thing that was interesting about it was just sort of the length to which there was local and state buy in as well as federal support. So it does give you this impression of being a bit like industrial history in the making, provided that there is more to this than just a massive waste of money.

And how big do you think the risk is that there is all this excitement and activity, but ultimately it ends up kind of wasteful.

The question that lingered with me was the question of final demand. I've mentioned the fact that there weren't many charging stations and many EVs once we'd left the West Coast. There wasn't a huge amount of buy in from people that we spoke to for EVs. I had a wonderful conversation with the owner of a gun shop in De Soto. He was scathing about the level of public money that was going into this kind of program, which of course he called his tax dollars. You know, he would only, I guess, trade in his Jeep, which you know, he absolutely loved for an EV if it really was a lot cheaper. So it's hard to know what whether the loop will be closed and whether there will be the final demand that makes all this investment in America worth it.

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We've got our Schumpeter columnist, Henry Tricks with us today. And I suppose this road trip you've been on, Henry, was really trying to cut through the political posturing and see what industrial policy interventions actually look like in practice. We've heard from one small town already, De Soto in Kansas. But a road trip wouldn't be a road trip if you only stayed in one place.

Well, quite. As Mayor rick pointed out, DeSoto is not far off the beaten track. It feels like a kind of relatively prosperous commuter belt town. But some factories are being set up in areas that are much poorer and much more remote, which is why we traveled to Stanton, Tennessee. It's a small village that's been in relative poverty since many of this mostly African American community left to work in the car factories of Detroit in the middle of the last century. So we fired up the trusty Honda once more and made our way to Stanton. So, yeah, here's the cotton fields on the left.

Yep.

So you can just kind of see the cotton buds. Sprinklings of white on the top of the field. This is cotton country. But in the midst of the centuries old agricultural landscape, a new industry is taking shape. Right into the distance, you can see the scaffolding on the horizon. A factory being built by the carmaker Ford, which is investing $5.6 billion in an EV plant, a battery factory, and. And a base for its suppliers, including the South Korean battery maker SK I.

Almost think that one was bigger because.

Look how far it goes down on the right. Oh, you're right. Yeah, it does. It is the biggest industrial complex that Ford has built in its history. The nearest town, Stanton, has a population of 400. Look at this. This is so pretty. It's just like a grove of trees. It's a cluster of bungalows and tidy lawns with a railway track running through the middle. It has a feeling of being forgotten by time. Yet it's on the cusp of a great transformation. To find out more, we are yet again in search of the mayor. No, no. Main Street's right ahead of us. Where do you see that? It says turn right onto Main Street. The Town hall building is frankly so small and cute, we nearly drive right past it. Town hall of Stannon. Where it says right there. Really? On the window. We can barely see it. There's so many jewels that Is absolutely classic. Inside I meet Mayor Alan Stabinski. He wears a bright yellow shirt and a beaming smile. Very fresh and spring like.

Yeah, that's gotta be it. I'm going with that.

Okay, so Alan's office is tiny. Inside, he has a map of the town to show us. And he loves maps and anything to do with planning. When I tell him about the purpose of my road trip around the US to see how America's industrial landscape is changing, his response is emphatic.

Oh, it's definitely changing.

What makes you say that?

Well, because we had a number of manufacturing industries who have moved from north side of the US to the south side of the U. S. It has to do with a lot of different factors. It has to do with tax rates. It has to do with the mentality of the legislators about business and being business friendly. And this biggest plant that for. I believe it's the biggest plant that they've ever done. Bill Ford was talking about why they made the decision here. The phrase that he used was it was a blank piece of paper. This is nothing but cotton fields around here. 4,000 acres with nothing on it. And they can build the plant designed however they want to. And that's one of the main attractions for Ford coming here.

Would you credit the Biden administration and the Inflation Reduction Act?

I would not. But that's my personal view.

This is not a pro Biden state necessarily. Right? This is a.

No, not necessarily. It's a Republican state. But you know, it takes both parties working together to make things happen in the country. Now, SK Innovations, which is the battery plant, they received, I think it was a 9 billion grant from the Department of Energy. So yes, that part was the Biden administration.

And how are people in Stanton taking this? It must be somewhat surprising to suddenly see all this work taking place.

We're overwhelmed. It's phenomenal. We love it, absolutely love it. Because roughly 40% of our people here, Stanton, live below the federal poverty level. That's four times the national average. And people have been living in multiple generations of poverty. So 40% of the people living below the federal poverty level have high paying jobs, training and high paying jobs right at their front door. And this will impact people for multiple generations.

And Mayor Stabinski seems thrilled to be planning Stanton's transformation at this point. He hands me a piece of paper. It shows the town's current population and how it is expected to grow year by year over the next decade. And you are anticipating right now at 450, 20, 35, 10,062. So that's more than a tenfold increase.

Huge. Just absolutely massive. So this is what I use. You all know what, you know what back planning is?

No.

Okay, so this is what I want to end up with. Okay, so what are the steps that have to be done for me to end up with? Whatever I need to do. So you figure out what those steps are and then you start planning. But you're planning backwards so you know what the steps are. You make sure you hit what you need. So I know in 2035 I'm going to have 10,000 people. Monday morning they're going to get up, they're going to flush the toilet and they're going to take a shower. What am I going to do with all that? I don't have enough sewer to take care of that. So what I did is I first did an analysis of our current water and sewer.

Yeah.

And I can handle 750 more houses, you figure two and a half people per house. So that gets me a little ways down the road, not very far.

Yeah.

So I, I put together a $4.5 million deal with American Rescue Plan money. That was during COVID And we're going to increase the size of our water treatment plant, make it massive.

What do you see over that time in terms of the kind of economic change that will be visible in this area?

Let me bring you a map.

I'll be right back. Lo and behold, Mayor Stabinski has yet another map to show me.

This is a map of Stanton, which is 322 acres. So from Stanton down to the mega site where the northern boundary is, we want massive amounts of retail along that way and behind it we'll have some mixed use apartment buildings and that kind of stuff. Offices too. And then we'll have subdivisions over here, retail along Highway 70 here. And we're a sleepy little southern town. We don't want to lose that.

Mayor's office.

Yeah.

All these, all these, excuse me, trains coming through.

Right on cue, a huge freight train comes rumbling through.

It blows its horn over there and over there. So you gotta wait for two enough.

To wake even the deepest of sleepers. You as a town kind of have to be entrepreneurial. You've toured around to try and get the lessons from other places that have made a success of their smallness.

That's right.

You know, could you just give me a sense of what those lessons are?

Okay.

I'll tell you one that's not going to make anybody happy. But it takes these entrepreneurial ideas and it takes fresh blood. That's the lesson we learn. So what I'm doing is trying to bring creative people to here, because when you get that core group of creative people together, ideas start popping and things start happening. And I see that as the lifeblood, the creative group of creative 30 people who are probably going to be outsiders who come in and make this town pop. So what I've got is an uphill battle to make this an artistic community. I'm not sure I'm going to win that battle, but I'm working as hard as I can.

Industrial investment, construction job creation, town planning and cultural coordinator. It's a big job for one man. But Mayor Stabinski's energy for his town seems boundless.

You fall in love with the people. This town needs help, so what do you do? You step up and you say, I'll help.

So what really struck us as we drove away from the meeting with Mayor Stabinski was this entrepreneurial spirit that he spoke of. I mean, many people, I guess, are deeply skeptical about whether this industrial policy will work, because effectively, the government is picking winners and deciding which industries will prevail. But if investments in places like Stanton kickstarter a new startup culture that could make it more palatable and more durable. In one way, this is sort of helped by Ford's setup in Stanton in the sense that it's not just building its own plant, but it's bringing its suppliers into the area as well. But the mayor talked of other ways that you can change a town to promote entrepreneurial zeal, which were even more surprising. For example, this idea that you actually need to find a way to bring in outsiders to provide new intellectual input, new ways of thinking. He spoke about one village that he'd visited that really inspired him that had kind of brought in from people outside. And one woman there set up a murder mystery train in the village. And this started to attract people from all over the place.

Well, as someone who loves both murder mysteries and trains, that would definitely be a big draw for me. And I guess, did people seem convinced that this new industrial strategy would ultimately be successful? You know, I guess that depends on these factories sort of ultimately being competitive. So do you think they will be even once the Biden money runs out?

Yeah, it's interesting. I mean, the trip was conducted against the backdrop of negotiations for the strike by the United Auto Workers, which actually broke out while we were visiting the factories down in the south. Obviously, one of the factors behind the UAW strike was whether or not to unionize or get union like wages in the EV plants and in the battery plants. Just the wage levels that the UAW has negotiated in the industry writ large raises questions about the competitiveness of the EV industry because workers in other car factories like Tesla, not to mention those in China, are not unionized to anything like the same extent.

And I guess one of the other concerns that some people have around the IRA is the possibility of launching this kind of global subsidy race. Was there any concern that you came across around the kind of protectionist elements of the policy and what it would mean in terms of America's relationships abroad?

There was no concern on the ground about this sort of protectionism. But certainly you hear concerns in other parts of the world, especially in Europe and in Asia, about these subsidies and the requirement that these cars and batteries be made with American labor will drain investment in clean energy technology from other parts of the world. So, yes, the use of subsidies does create unfair competition to attract investment. I think it's fairer to say that what people on the ground really expressed regularly was a profound concern about how they felt the blue collar jobs that used to be a part of America's industrial heartland had gone to China. The Biden administration wants to change that narrative and it wants to get credit for it. And that's one of the political motivations for the Iraq. I have to say I was surprised at how few people were prepared to credit the Biden administration for this. There was a lot of support for Trump. Even if elected President Trump might nix some of these investments because he doesn't seem to have any interest in clean energy anyway. Alice. Tom, what do you make of all of this?

Yeah, to build on what you just said. My highlight from the show is when you asked Alan or Mayor Stabinski essentially if he thought Biden's policy had lured anyone to town, to which he said no, and then said that actually one of the factories got a sort of $9 billion grant or something. You know, Alan is clearly a man who really cannot be bought. The most interesting point that I want to dwell on is this idea that there are two layers of policy at work here. There is the geopolitically defensive strategy of we can't have all this stuff made in China. And there is the push to transition to greener energy. And then addition to that top line policy ambition, there is this urge to rejuvenate small town America by building factories, creating good job, etc. It is a very clever way of going about it because I might find it easy enough to be dismissive about what I often think of as sort of nostalgia driven Policy. This place was prosperous once, and then the economy changed, so let's try to force it to be prosperous again. But I do find it much harder to dismiss the impulse to invest in clean energy or to make sure that America is not too reliant on an increasingly hostile China. So it's two birds, one stone here, or two birds, one battery.

One other thing that struck me was this idea that getting factories into these places that have struggled with the deindustrialization of America in recent decades is probably not a sufficient condition on its own for them to thrive. So Mayor Allen was talking about, for example, building a creative community in his town, which, frankly, is not that straightforward. So I actually grew up in a small country town in Australia and lived there until I left for university in Sydney. So it had a population of around about 30,000 people. And frankly, it had a lot of trouble. Once upon a time, there'd been a paper mill that provided jobs, but that closed down and it wasn't exactly the type of exciting, dynamic place that many young people want to live. And I think manufacturing jobs can be a great foundation for places because they bring decent wages and that helps lower unemployment, which helps lower issues around crime and drug abuse. But I think these places also require a more holistic program of renewal, which is definitely possible, but they certainly have their work cut out for them. And with that jolly note, I think it's time for us to go to stats of the week. Henry, this will be the first time you've done this, and I know you've come prepared, so why don't we put you on the spot and ask you to go first?

Well, how very kind of you, Tom. Yeah, my stat of the week is $160 billion, and it relates to a story that I have written about in this week's edition on Disney, which is facing the beginning of a renewed activist challenge by Nelson Peltz, the investor who had threatened to fight a proxy battle at Disney earlier on this year and then retreated after Disney had introduced some cost cutting efforts that he thinks have not really panned out since then. So he's back. But that 160 billion is a figure that Peltz and Tryan, his company, put out, which sums up the amount of money that Disney has spent on M and A Capex and content since 2018. And curiously enough, 160 billion is just above the market cap of Disney today. So whether that's a lot of wasted money or not is a big question.

That's a spending binge that rivals the IRA at Its magnitude, you know, they've really gone nuts. My stat of the week is actually in keeping with, I guess, content and movie creation and also the idea that places used to do things and don't always do them forever. Which is I was in Jacksonville, Florida this week to give a talk and I learned that it once upon a time was the precursor to Hollywood. So at the turn of the century, there were 30 movie studios in Jacksonville, Florida. Many of them made movies specifically for African American audiences. It eventually lost its crown to Hollywood over time, but for a while it was by far the largest movie production based in America.

My stat of the week is zero, which is the number of quarters in which WeWork has turned a profit since the company was founded in 2010. So frankly, it's quite impressive that it's taken the company 13 years to go bankrupt, which it finally did earlier this week. And the economics of this business has always just been very dubious in my mind. At first they expanded way too rapidly with no discipline around which locations were profitable and which weren't. And then more recently, they've been caught out by this business model in which they would take out leases for 10 or 20 years, refurbish a property and then rent space out to people for kind of a month or so at a time. So when the office market collapsed post Covid and prices fell, it was impossible for them to rent to tenants at a rate that was sufficient to cover their long term leases. Now, interestingly, the company may actually come out from all this stronger as a result, because it can now break all those leases under the protection of bankruptcy. So I wouldn't count it out just yet. But certainly its equity investors have now been well and truly torched.

Yes, the equity investors in WeWork have been wiped out, but I hear Adam Neumann, the founder, has made it out all right. He's walked off with a billion dollar plus paycheck. So it sucks for some people WeWork, but maybe not everyone.

Well, with that, all that's left for us to do is thank all the people who spoke to us for this episode, Rick Walker, Kiera Horn and Alan Stabinski.

And I'd also like to thank Santiago Tricks and Water Tricks for helping with the reporting and the recording of this incredible road trip. And of course, for the moral support and good company along the way and the techno and the tech.

And thank you for listening to Money Talks.

You can always write to us@podcastseconomist.com Today's.

Show was produced by Marie Keyworth and Dan Asher.

Our sound engineer is Tingley Lim.

And the executive producer is Jason Palmer.

I'm Henry Triggs.

I'm Alice Fulwood.

I'm Tom Lee Dublin.

And this is the economist, Sam.