10-22-25 - 6am - Shutdown Spending and AI Spending & Power

Episode Transcript

Speaker 1 (00:00):
Good morning from on the road to the former great
state of Colorado. I think President Trump is kind of
blowing a little bit of that construction dust into the
eyes of the Democrat senators. What do you think, did
everyone have a great day?

Speaker 2 (00:16):
Have you seen the pictures of the of the bulldozers. Yeah,
I was shocked to see it. I mean, I knew
they were going to rebuild, you know, they were going
to rebuild the East Wing, and they were going to,
you know, build this giant ballroom. And I'm actually in
favor of the ballroom. If you've never if you've ever
been to a state dinner, when I know most of
you have not been to a state dinner, but the

(00:37):
state dinners in the East Room, which is on the
far east end of the East Wing.

Speaker 3 (00:44):
Go figure.

Speaker 2 (00:44):
Yeah, I don't know how they did that, but they
figured out. They put the East Room on the end
of the East Wing. It only holds about two hundred people,
and so when you have a state dinner, which involves
meeting more people, like four to six hundred people, they
actually have to put some of the people out on
the lawn in those tents.

Speaker 3 (01:06):
Some people get sat at the kidy table outside.

Speaker 2 (01:08):
Yeah, which which is really kind of what it turns
out to be. It's like, gee, I flew all the
way here from Mongolia to go to attend the state dinner,
and I'm in the tent.

Speaker 3 (01:18):
Well, I hit a state omen state in the tent.

Speaker 2 (01:22):
So his his doing it, I think, is fine, and
it's not costing taxpayers anything.

Speaker 3 (01:31):
I'm not quite sure.

Speaker 2 (01:32):
I've heard that he's paying for it himself personally, or
I've heard that, you know, other people are donating to it.

Speaker 3 (01:38):
I'm not sure. It doesn't mean but taxpayers are not
paying for it.

Speaker 2 (01:42):
There is the White House Historical Society, so whatever they're
going to reconstruct, at least on the front facade, is
going to have to meet whatever historical standards are required.
And I've heard that he has detailed plans about how
this ballroom is going to exist, and then the ballroom
will be there for everybody else. So I really don't

(02:05):
have a problem with it. It's it, that's fine. I
was just kind of wow. I saw the front being
torn down. It was just kind of shocking to see
it for the first time.

Speaker 4 (02:15):
Construction is a site that you're okay seeing, but it's
just weird seeing it at the White house.

Speaker 3 (02:20):
Yeah.

Speaker 2 (02:20):
Then I saw it last night, a great meme about
there wasn't and I thought, this is how you have
to be so careful about the news, because someone had
presented this on x as an actual news story that
there had been an accident at the construction site. So
I'm like, oh, geez, what happened. You know what they

(02:42):
do is they showed the giant crane that's you know,
digging in and pulling up the stuff and swinging around
and then dumping the pile to be hauled off. Okay,
and when they dump it off, there's a giant like
like a Macy's Thanksgiving Day paryed balloon of Donald Trump
being dumped off.

Speaker 3 (03:03):
And that was the accident. I was so mad at myself.
It was funny.

Speaker 2 (03:08):
It was wipe out loud funny because I thought there
had been an accident and oh no, it was somebody
making fun. They had picked up Donald Trump and dumped
him on the front lawn. I'm easily entertained, dragon, Clearly,
I'm easily entertained.

Speaker 3 (03:23):
Uh.

Speaker 2 (03:25):
Thely thing that I would say about the timing, I'm
not sure that even though taxpayers aren't paying for it,
I think the timing might be a little politically off
because if the Democrats were smart, they would be complaining
about it. I'm not sure they are, but I really
don't care what the Democrats complain about or not. Somebody

(03:47):
said on the t speaking of Democrats not even getting
to the story I want to start off with. But
in the text line, somebody.

Speaker 4 (03:55):
Wrote, let's see, Oh, if the shutdown goes to November
twenty third and social Security checks don't go out, it's
going to cost Republicans next November.

Speaker 2 (04:09):
Americans. Anger will be anger will be taken out on
the party in power. That is how I see it.
It's our wallets stupid. That's not going to happen. Social
Security checks will go out because guess what, it's automated.

Speaker 3 (04:25):
Yes, it's automated.

Speaker 2 (04:27):
Now, if you are currently not receiving a Social Security
check but you have applied, that may be delayed. You
will still get your back social Security checks, but you're
not getting it now. You won't get you. I won't
even say you won't get it. It's just likely that you.

Speaker 3 (04:49):
May not get it.

Speaker 2 (04:50):
Because while Social Security main office in DC is operating,
it's pretty much on autopilot. Some of the local offices
may not be fully staffed, so there might be some
delays there. Prediction of forty five twenty nine government shut

(05:11):
down will end, then Republicans will cave during negotiations and
the Dems will get what they want at the end.

Speaker 3 (05:18):
Thoughts, I'm not really sure you know.

Speaker 2 (05:25):
All of this goes all the way back to remember
when John McCain had been sick. He'd been down in
Arizona battling his cancer or something, and he triumph fully
walked back onto the Senate floor and they were doing
a vote on whether or not to eliminate Obamacare, and
he walked in and with his bad arm, gave a

(05:49):
thumbs down, and the place erupted because they had John
McCain had had single handedly saved Obamacare. The down is
really about two things. It's about the Obamacare subsidies, and
it is about all the additional news spending, which amounts

(06:12):
to almost a trillion dollars that Democrats want to add
to the cr So I think Republicans are in a
fairly good position. Think about this in terms of Obamacare.
Have you have you ever had now we knew this
for those of us who have both opposed Obamacare from
the very beginning, we knew that this was a wolf

(06:34):
in sheep's clothing.

Speaker 3 (06:36):
It was a trojan horse.

Speaker 2 (06:38):
It was the proverbial foot in the door to socialized,
nationalized healthcare. Why does Obamacare need subsidies? I thought it
was going to lower premiums. I thought it was going
to you know, if you like your doctor, you can
keep your doctor. It has done nothing, absolutely nothing that

(06:59):
it was intended to do. And in fact, it hasn't
lowered premium It has increased premiums. And they have been
subsidizing premiums on that stupid exchange in order to keep
the price of the premiums down. Because without the premiums,
then the truth about Obamacare is fully exposed, and we

(07:20):
know that the premiums are skyrocketed, and they've skyrocketed because
you have a government mandated market insurance market and a
mandated risk pool in Obamacare in those subsidies, and so
the insurance companies are not able to develop risk pools
as they would normally in any other situation, and so

(07:43):
it's a false, artificial risk pool, and so they have
to price accordingly. Since they price accordingly, it's extraordinarily high.
And because it's extraordinarily high, they're providing subsidies to keep
those premiums low. In other words, everyone, everybody is paying

(08:07):
for the increased cost of Obamacare. In addition to that,
the Obamacare subsidies and some of those policies on the
Exchange are available to certain illegal aliens, not all illegal aliens,
but some illegal aliens.

Speaker 3 (08:28):
I don't want any.

Speaker 2 (08:29):
Illegal aliens getting subsidized healthcare, and in fact, we ought
to tighten up the rules that if you walk, if
you go into an emergency room because you have a
gunshot wound, you go into an emergency room because you've
been involved in a car wreck and you need to
be checked. I do I agree with the law that

(08:50):
says we will take care of you whether you can
pay or not, because it's it wasn't your fault, unless,
of course, the car was your fault, or you were
a gainer, but it's gonna be too difficult to weed
those out. But if you walk into an emergency room
because of a gsw or you know your carotid artery

(09:11):
is bleeding out because of a car wreck, whatever it is,
then yeah, I think that we should try to take
care of you and save your life. However, we also
pay for something else in ers, and that is these
illegal aliens don't have primary care physicians because they can't
afford it, so they go to the er because the

(09:32):
kid has a cold, or the kid has a temperature,
or somebody's got an upset stomach. I don't think we
should be paying for that. You want that paid for,
then there ought to be some private charitable organization that
either pays for that or covers for that. I don't
think the taxpayer should be doing it. Insofar as will

(09:52):
the Republicans cave, I don't know that they will. There
may be some given ta but cave versus give and
take is are two different things. Nothing's going to change
until we recognize and admit that socialized medicine doesn't work.
Nationalized healthcare doesn't work. We get the prime example in Europe.

(10:16):
All you have to do is look at Europe. They're
spending too much money there and so boom, stop it,
just absolutely stop it. Now back to the story that
I wanted to start out with infrastructure. He has to
be talked about the energy projects and how Chris Wright,
the Secretary of Energy, has been saving us this money

(10:38):
by eliminating these fools air and projects that are going on, Well,
there's something else going on, and I would put it
this way. We have an infrastructure crisis in this country.
And it's not as I did for the Michael Brown minute.
It's not, for example, the Denver City County in jail,
which is understaffed by about sixty seven and they can't

(11:00):
keep people hired, they can't pay there because they're spending
money on all the wrong things. There is developing across
the country this localized resistance to these data centers, and
that risks national security and quite frankly, at risk our prosperity.

(11:23):
Someone asked me, yeah, I forget what the context was
when I thought about artificial intelligence, and I'm four. I
think the development of artificial intelligence is going to do
some really great things for our society, including in our
national security and our national defense. I also believe as

(11:43):
to localize it, there is the city of Aurora yesterday
adopted a new facial recognition program so that they can
follow up on tips, they can follow up on investigations,
is the way they described it on the news story
last night. However, they can't use it to arrest people.

(12:07):
The company that they've hired uses artificial intelligence in this
facial recognition program, and they just settled a fifty million
plus lawsuit because their artificial intelligence wasn't working correctly and
some people were being either detained or arrested based on
false positives on the facial recognition. So City of Aurora

(12:33):
may be stepping into something prematurely trying to clean up
crime and Aurora, and I think that's one of the
examples of a downside of an artificial intelligence. It's just
not quite ready for prime time yet. When I went
to New York a couple of what I was saying, what's
it been now, two weeks ago, week and a half ago?

(12:54):
It you still walk up to TSA with pre check
and you I'm trying to think, yeah, I did, I
showed on my Global entry card. But then they compare
the picture that's on that card, which is several years old.
Of course I don't age at all, so I'm actually

(13:15):
looking younger than I was when the picture was taken
two years ago. As I stand in front of a
camera and that camera matches using artificial intelligence, the picture
that that takes with the picture that's on the Global Entry.

Speaker 3 (13:26):
Card, I don't know how reliable that is.

Speaker 2 (13:30):
I don't really care how reliable is because it's tsa
mis kubuki security anyway. But anyway, the point being, there
is good and there is bad about artificial intelligence.

Speaker 3 (13:41):
But I think we ought to be developing it.

Speaker 2 (13:44):
In terms of what we can do with it militarily,
what we can do with it, in terms of national security,
well we can do it with it, in terms of healthcare,
any number of things. I think AI is something that
has more positive than good, but everything it always has
a bad side to it too.

Speaker 3 (14:02):
Well.

Speaker 2 (14:03):
In the past year alone, sixty four billion dollars worth
of data center projects have been blocked or delayed, and
of that sixty four billion dollars, eighteen billion dollars were
outright cancelations of data centers, and another forty six billion
dollars is stalled in I get you call it political limbo.

(14:30):
Those numbers hide something. It hides a dangerous misunderstanding, and
it's all across the country. It's you know, there's opposite.
For example, right here in Aurora, there's opposition that to
that facial recognition program that may or may not be
one I think is a legitimate concern. They've adopted it anyway,

(14:51):
But whether it's really going to work or not well,
that remains to be seen. We'll find out if they
faulty or arrest somebody, and then taxpayers have to fag out,
you know, the bazillion dollars for a false arrest. But
everywhere from Aurora to Indiana to Wisconsin, all over the country,
local opposition movements have turned hyper scale data centers into

(15:15):
these symbols of corporate overreach and environmental harm. But in reality,
these projects are critical infrastructure for our economic future and
our national security. So as as I was diving into
the cancelation, it became obvious that the opposition is built

(15:38):
on fear. It's not built on fact. And if this
fear goes on unchecked and nobody really analyzes it closely,
is going to cost us jobs, investment, and I think,
most importantly, our global leadership in artificial intelligence. Astonishingly, opponents

(15:59):
are claiming that these data centers are not going to
create jobs. I think they're absolutely wrong. Take the Port
Washington project in Wisconsin. It's an eight billion dollar project
over its nine year construction. It'll take nine years to
construct this. Everything from starting with you know, drawing up

(16:21):
the plans, getting the permits, preparing the ground, doing the construction,
and finally, you know, like like a car, sticking the
key of and literally turning it on. Will take nine years.
During that time, it is projected to employ more than
ten thousand workers, and then once it becomes operational, it

(16:46):
will directly employ five hundred highly paid engineers. I know
engineers are way overpaid, but they're going to get paid very,
very well. But that's not where it stops. Five hundred
highly paid engineers in one data center in Wisconsin translates

(17:06):
to another five thousand ancillary jobs in the local economy.
So for every permanent data center job, roughly ten more
are created in surrounding businesses. You have electricians, plumbers, truck drivers,
restaurant owners, the shopkeepers, all of the retail everything that
goes on in a consumer driven economy. The construction phase

(17:31):
alone could sustain an entire community over the nine year
construction project. And then once it gets fully operational, that
construction shifts from construction to operational, and operational, all those
ancillary jobs will stay in place because of the people
that will work in the data center. What's these or

(17:55):
its irrational fears?

Speaker 3 (17:56):
What it is?

Speaker 5 (18:00):
Good morning, Michael, and dragon. Did you happen to see
the Atlantic is pushing a story about how wonderful our
governor is since he supports raw milk and vaccine choices,
saying no other governor supports r f K Junior like
he does. That would just make me laugh, if it

(18:21):
didn't make my blood boil.

Speaker 3 (18:24):
Have a great warning, kiss ass. Literally they are trying
to get police elected president or something. I don't know
what they're doing.

Speaker 2 (18:37):
Seventy three rides, Michael, look into how much electricity those
plants need and how much it's going to drive up
the price.

Speaker 3 (18:42):
For everybody else.

Speaker 2 (18:44):
Ah, it might drive up price of electricity temporarily, but
you know what it's going to do. It's going to
utterly destroy the idea that we need to get rid
of fossil fuels and turn so to green renewables like
wind and solar, and we're going to see prices of

(19:05):
electricity actually start to drop. It's not going to happen immediately,
but it will over time because we're going to get
rid of all of this bull crap about oh all
of our electricity. You know, if we are building a
data center in Colorado, do you think that Excel has
the baseline power needed to do so based on their

(19:27):
wind and solar projects. Absolutely not they I'm not sure
our grid could sustain it. Two, they don't have the
baseline power, so they're going to have to either build
new power plants, and those power plants are going to
have to be fueled by cold natural gas oil whatever
they can't or maybe nuclear. Maybe we can actually develop

(19:48):
some nuclear plants. Wouldn't that be fantastic. So yeah, there
may be a spike in electric prices for a while
in some of these areas, but over time it's going
to stabilize power supply, and I think that's another benefit
of the data centers. Go back to the construction phase.

(20:09):
The construction phase alone could probably sustain like this one
in Wisconsin Port, Washington. It could probably sustain that community
for quite a while. But then the long term tax
base expands. You have, you've got the property taxes, you

(20:30):
have high paying, stable.

Speaker 3 (20:31):
Employment that strengthens the local economy.

Speaker 2 (20:35):
So the narrative that the data center only provides a
handful of jobs completely ignores the economic multiplier effect that
ripples through every small town that's going to host one
of these. But the economic benefitic goes beyond the payroll.
Data centers contribute millions of dollars in property tax once

(20:57):
any abatement might expire, and they don't all get a
abatements even during the incentive periods. Though even if there
is an abatement period, they pay substantial local taxes. They
rarely strain public services like schools or hospitals, So compared
to residential or industrial alternatives, data centers are fyscal assets.

(21:19):
They're not physical liabilities. Data centers don't send kids to
public schools or cause traffic congestions, you know, once they
become operational. Now they do demand reliability, but they don't
demand social services. The tax revenues that they generate will
fund precisely the infrastructure improvements that are needed, roads, water systems, broadband,

(21:44):
everything that a community depends upon. So these people who
are out there opposing them on the basis of economic skepticism,
or I might add truly economic ignorance, is to misread
the ledger. There's a second false claim, and it gets

(22:05):
to your point about raising local electric prices. I actually
think the opposite would be true in a long term.
Many hyper scale scalers like Meta, Google others, they're building
their own power plants from natural gas turbines small modular

(22:28):
nuclear reactors. Microsoft is restarting I thought I mentioned yesterday.
I thought it was Google. I actually thought it was Meta.
It's Microsoft. They're the ones that are restarting the three
Mile Island reactor to power its data center. Amazon is
contracting directly with the Susquehanna Nuclear Power Plant in Pennsylvania

(22:52):
to buy excess capacity that would otherwise go unused. In Texas,
new data centers are being built with being built with
on site gas fire generate generators that operate entirely behind
the meter, so they're not taking any power from the grid.

(23:14):
The company Deloitte estimates that the new nuclear capacity alone
could supply upwards of ten percent of US data center
power by twenty thirty five, just ten years from now.
Then you take hyperscalers like Amazon, Google, Microsoft, They've already

(23:37):
contracted for nearly fifty gigawatts of new clean energy, roughly
the equivalent to the electricity consumed by more than seventeen
million houses. So far from actually draining public resources, they're
underwriting the largest private sector build out of renewable and

(23:57):
reliable power through the use of natural gas, coal, and
nuclear exactly what we wanted to happen, and they're causing
it to happen. So there's just this. When you really
dig into it, you find out that there's this myth
that local ratepayers subsidized corporate electric electricity use is.

Speaker 3 (24:21):
That's another distortion.

Speaker 2 (24:23):
Utilities charge large customers the full cost of their connection,
including the infrastructure built to serve them. So if there
were a data center, for example, going up, I don't know, sir,
where the BUCkies is going to go instead of a BUCkies,
because you know that's too much traffic, too much congestion,

(24:45):
everything else. Put a data center in there. Now, that'll
piss people off. Put a data center in there, you
know why, because all of the infrastructure required to serve
that data center, holding a road to access it, for
the workers, extending the grid to provide the power, excel

(25:07):
pace for all of that. And they charge that off too.
They charge it too. Since they charge it off, they
charge it too the data center to the operator. Now,
if that's not happening, that problem then is in state regulation.
It's not the data center's fault, that's the state regulation problem.

(25:29):
Properly structured structured these facilities help utilities spread fixed costs
across a broader base, in turn theoretically lowering rates for
everybody else. Now, in regions where the projects have been canceled,
guess what's happened. Electric prices have driven faster than in

(25:52):
those where the data center construction continues. California, it offers
a cautionary example. A strict local moratorium on new data
centers coincided with skyrocketing rates, and it strained the grids.
In contrast, Texas, despite surging data center growth, has maintained
relatively stable rates because of expanded capacity.

Speaker 3 (26:16):
Simple lesson in that.

Speaker 2 (26:19):
Blocking growth increases scarcity, and scarcity increases prices, and then
communities irrationally fear that data centers are going to deplete
local water supplies.

Speaker 3 (26:34):
Again, I think it's a misunderstanding.

Speaker 2 (26:37):
Modern hyperscale facilities can run entirely air cooled, consuming zero groundwater. Google,
Amazon Meta all deploy air cooled systems where water scarcity
is a concern in that area. Now, in a water
rich region, they can use closed loop cooling systems that
recycle the water continuously. Microsoft Equinix they've all pledged to

(27:03):
be water positive by twenty thirty, meaning that they will
replenish more water than they consume. So the days of
these massive evaporative cooling towers, that's disappearing, if not largely
gone already. Even in large projects, water drawl can be

(27:24):
engineered out entirely with negligible impact on performance. Air cooling
requires more electricity but eliminates the local water use. That's
a trade off that hyperscalers have been willingly accepting in
order to protect community resources. I'm all for these, as
you can tell, but these facts rarely make it into

(27:49):
the town hall debates where quite frankly, I think that
people who are just scared of innovation, scared of a
big giant project coming in, particularly because it involves Meta
and Google, are instantaneously and reflectively, reflexively just naturally opposed

(28:10):
to it.

Speaker 3 (28:11):
I think it's wrong, Michael.

Speaker 6 (28:13):
It reminds me last night I went to a meeting
and I had to explain the idea of creative destruction
to a person because they were very upset that technology
was going to take jobs. And I had to explain
how well we had the buggy and now we have
the car. And it was just really sad to me

(28:34):
that I had to explain that so I think maybe
you should take a moment and talk about creative destruction.

Speaker 2 (28:41):
Yeah, I'll do that, but let me do that, and
I may have to carry this over the next hour
because of a couple of text messages. I love this
one from three zero five six Mike. I love how
you constantly attacked liberals for Lyne and then accept the
huge liberal corporation pledges to push your narrative. Really, that's

(29:02):
interesting because am I just accepting this. There's actually precedent
for what I'm arguing. Google, Oh, big evil Google actually
sat down and worked with Nevada's in the energy and
imposed on themselves and negotiated a special tariff that funded

(29:22):
renewable generation without raising rates for anybody else. Meta. Facebook
did exactly the same thing in Oregon. In Oregon, they
contracted for geothermal power under a structure that shielded customers
from those additional costs. Amazon's nuclear deal in Pennsylvania will

(29:44):
keep an existing power plant alive for at least another generation,
and that will sustain local jobs and stabilize rates. So
these arrangements, these so called long Hi, I'm just I'm
a corporate shill here. No, these are actual real pledge.
Is that they've actually engaged in and agreed to. So

(30:05):
rather than just showing up at your local city council
meeting or your state legislature and bitching and moaning and
opposing it, maybe you ought to say, hey, listen, we
don't want our rates to rise, so we want you
to bear the cost of this. These companies are willing
to do this, and they're willing to do it because
they know how essential that these data centers are, not

(30:27):
just for their business. But it gets me into the
second phase of what I wanted to talk about, which
is how important this is to us in terms of
our national security. But before I get to the national
security stuff, I think that somewhat to your point, people

(30:49):
need to be clearly educated about what drives energy prices
and how modern data centers operate. Utilities and Hyperscalers ought
to engage early, explain their plans, offer transparency about the
resources they're going to use. But they could actually go further.
They ought to voluntarily insulate local rate payers from any

(31:11):
potential impact by them paying the higher electric rates, or
them salves funding if they want to fund residential solar
battery systems nearby, or they want to build small nuclear
power plants, then they ought to incur They ought to
incur those costs themselves. That approach would turn the opposition

(31:31):
into partnership. Imagine a community. Now I don't like solar,
but imagine a community where every home got a subsidized
rooftop solar panel system because a data center next door
paid for it. That would transform the resentment into pride.

(31:51):
Got I got this solar panel and because they want
me to be able to get electricity because they're over
here using up the natural gas or the coal or
the nuclear. I mean, there are ways to do this,
but the just the absolute blinders on in terms of
opposition is ignoring how critically needed these data centers are

(32:17):
for the new economy that we're moving into. And it
is creative destruction, absolutely it is, But just because it
is doesn't mean you should oppose it. And our national
security will be compromised if we don't allow these to

(32:38):
move forward. The economic loss that we would suffer if
they don't go forward is just part of the story.
There's also a national security dimension, and I think that
may be worth delving into for at least a few
minutes after the top of the hour, But come on,
corporate shill. You know what the problem is. Too many

(33:02):
politicians just capitulate if you want, if you don't want
higher rates, there's a way to say, oh, you want
to build a data center here. I hear in Wyoming. Oh,
our rates have gone up in Wyoming. Maybe that's because
your local politicians just capitulated.