Do not mistake a resilient global economy for populist success

They simply want to have their cake and eat it too. Plenty of times post-GFC where parties have tried or proposed much needed reform only for the voters, gerrymandered by the press, to throw their toys out of the pram. Theresa May’s “demantia tax”, Starmer’s winter fuel allowance for example.

Sadly it feels like it’ll probably be taken out of everyone’s hand, through some sort of economic crash or worse, to get people to be realistic again.

Yes.

The rare earths situation is embarrassing. This has been a political football for years now, but the efforts to fix it aren't working very well.

First, you need a mine site and a mine. The US has a big one at Mountain Pass, California, and it's producing. But in the past twenty years, it's gone bankrupt twice and has been through three owners, because there were a few rare earth gluts and the price crashed. Also, they once had a big spill from a retention pond, and that was expensive.

Mountain Pass isn't the only ore deposit in the US. There's what's supposed to be a good one in Montana. But the company developing it has been doing "studies" since at least 2023.[2] There are a few other rare earth "mining" companies which don't produce anything yet. There's one in Tennessee with a "definitive feasibility study" underway. I'm tempted to say that the real product is the stock. Anyway, it's not like there's a need to go to Ukraine or Greenland for rare earths. It's all available in the US, with a decent climate, good road access, and no wars.

Second, you need a beneficiation plant at the mine. This takes in rock and dirt, pulls out ore with a reasonable fraction of rare earths, and outputs almost as much waste as it takes in ore. This is a somewhat messy process. In China, the settling ponds are visible from space. Mountain Pass has a better process (the Sierra Club approves) and doesn't make such a mess. The waste is dried, the fluids are reused, and the dry waste can be put back where it came from eventually. This is now a known technology and is being replicated at some Australian mines.

Then you need a separating plant, where the actual rare earths are separated out. The US has very little capability in this area. Not for any good reason. There's a small startup.[1] They're slowly scaling up. Production in 2027. There's another startup, Medallion (then Gabo, then Gamma) which has been fooling around since 2020 without building much. That's one of those companies where you read five years of press releases and they're all about financing, reorgs, and management changes, with no actual product. Here's another one, RER. They've been at this since 2021, and they have a little demo plant in Wyoming.[3]

Then you need a smelting and magnet making plant. This is a modest size operation, because it processes tons, not millions of tons, of material. One has been built in an industrial park in Texas. That took funding from DoD and General Motors. Not big enough to replace all imported magnets.

This is US postmodern capitalism. The US financial system just doesn't seem to be able to bring a complicated heavy industrial project to completion in a reasonable period of time.

[1] https://rareearthexchanges.com/news/ucore-secures-18-4m-dod-...

[2] https://uscriticalmaterials.com

[3] https://www.rareelementresources.com/technology/

There’s a lot of work being done by the term “all other things being equal” when using a measure like GDP.

I don’t think we are in times when all else is equal.

MSCI EM has outperformed MSCI US since it's inception in 2001 if you look at total return.

Which will disabuse you of the notion that we are "high on debt". "high on savings" perhaps.

We can always afford to make things better. Afford is never the issue.

Political will to take on the vested interests is the issue.