National Guard in SF? US vs China on Rare Earths, Trump-Xi Meeting, Price Floors, AI's PR Crisis

San Francisco's crime rates are improving, but concerns remain about open-air drug markets and the city's approach to homelessness, while the US and China navigate a complex trade relationship focused on critical rare earth minerals and AI's societal impact faces both economic and public perception challenges.

• San Francisco is making strides in crime reduction, but debate continues on federal intervention for drug markets.

• The US seeks to counter China's rare earth dominance through strategic domestic investments and policy.

• AI's societal integration faces headwinds from local community opposition and job displacement concerns.

San Francisco is experiencing a notable improvement in crime rates and downtown revitalization, yet a debate persists on whether federal intervention is needed to address ongoing drug and homelessness issues, particularly in blighted areas. Concurrently, the US and China are engaged in a strategic trade battle over rare earth minerals, with the US seeking to reduce its dependency on China by incentivizing domestic production, acknowledging China's long-term mercantilist strategy. The burgeoning AI industry faces a public relations crisis, as local communities push back against data center construction due to concerns about energy costs, water consumption, and noise, highlighting a need for better communication on AI's economic benefits and a strategic response to fears of job displacement.

San Francisco Crime & Governance

• 00:04:24 San Francisco is experiencing a significant improvement in crime statistics, with citywide crime down 30%, downtown crime down 40%, and homicides at a 70-year low. This positive trend includes a record low number of street tents and a net gain in police officers for the first time in seven years, which is boosting convention and hotel bookings. Despite these improvements, some argue that the city's liberal legal system still constrains efforts to fully address open-air drug markets and the related issues of addiction and homelessness on main thoroughfares like Market Street.

Debate on SF Intervention

• 00:10:04 A discussion emerged regarding the necessity of federal intervention in San Francisco, spurred by a comment from Donald Trump about sending in the National Guard. While some believe federal authority could swiftly clean up persistent drug dealing networks, as evidenced by temporary cleanups for President Xi's visit, others argue it's unnecessary given the city's current progress in crime reduction and law enforcement. The debate highlights a tension between local governance efforts and the potential for a targeted federal operation to resolve 'intractable problems' in blighted areas, especially concerning drug dealers who are mostly non-residents benefiting from the city's permissive environment.

US-China Rare Earths Battle

• 00:20:47 The US-China trade relationship is intensifying, with China imposing export controls on rare earth minerals and the US threatening 100% tariffs. Rare earths are critical for EVs, batteries, and robotics, and China has achieved dominance through substantial government subsidies and market manipulation, driving out US competitors. The US now faces a strategic dependency on China, prompting discussions on how to re-shore production and ensure supply chain security, potentially through price floors or strategic reserves to counter China's mercantilist tactics.

US Strategy for Rare Earths

• 00:24:46 The US is exploring strategies to re-establish its rare earth industry, with a focus on creating certainty for investors through mechanisms like price floors to counteract China's ability to undercut prices. Some argue for deregulation and tax incentives to foster a free market, while others advocate for government as a 'last resort buyer' to create strategic reserves, similar to petroleum. Developing new mining and processing technologies that are environmentally safer and unlocking unproven reserves in the US could also reduce dependency and enhance competitiveness.

China's Geopolitical Strategy

• 00:41:03 China is seen not just as a rising power but a 're-ascending' one, having held the world's largest GDP for 70% of the years since 1500, according to historical perspective. Its current strategy involves a blend of public-private partnerships, centralized five-year plans, and a cascading system of capital allocation that fuels national priorities like EVs, enabling companies like BYD and Xiaomi. This approach poses a significant challenge to the US-led international order, which mistakenly believed China would liberalize as it grew richer, rather than become a geopolitical competitor.

AI's PR Crisis

• 00:53:01 The AI industry faces a growing public relations crisis, as evidenced by local communities in Indiana, Wisconsin, and Arizona pushing back against major data center projects from Google, Microsoft, and Amazon. Concerns include rising electricity prices, water consumption, noise pollution, and a lack of clear economic benefits for local residents. This 'bottoms-up' resistance, coupled with fears of job displacement, creates a negative narrative around AI, necessitating a federal regulatory framework for clarity and industry leaders to invest free cash flow into community benefits and articulate a more inclusive vision for AI's abundance.