Folks who know me on a few “socials” know that I like to put on a specific finance podcast before heading out for a run. It’s what I lightly call my “sociopath pod”, because a great many episodes get deep in the weeds of market analysis in ways that show profound indifference to the overall impact of these fields to human thriving.
Why on Earth would I do that to myself, as a humanist?
Well, for some reason, listening to podcasts like that gets me riled up enough to make for better run-times, and good pacing on the track. We all have our catnip, right?
But in contrast with some of those worst-offending episodes on Bloomberg’s Odd Lots, I was pleasantly surprised last week to come across an episode of Planet Money that did an excellent job spanning the spectrum of human consequences for state financial policy and major market shifts in service to the new “green” energy economy.
So, you know: credit where credit is due!
Like The Indicator (a short podcast stemming from Planet Money), this NPR production often favours silliness and an upbeat tone—which is understandable, but also seriously limits the content that one can tackle well. If every topic needs a goofy “dad joke” thrown in to advance the narrative, the journalists involved are always constrained in their analysis by whatever theme will or won’t elicit the best chuckles.
And a bit of that silliness still shows up in “Bringing a tariff to a graphite fight”, especially with an anecdote involving the similarity of an expert’s name to Hugh Jackman… but otherwise, the episode is a masterclass in making its abstract, globalized topic more relevant to everyday (US) listeners.
Do these hosts cover everything of relevance to this topic? No, not in 25 minutes—and the segment is missing part of the equation that we’ll talk about more tomorrow.
But today, as a wee reflection to start our week off right, let’s review the journey that this episode does go on, to see what we should be expecting from all related news.
(Yes, living in a world with better financial journalism would mean that I’ll need a new boost for my morning runs—but in service to the greater goal of media literacy, that’s a sacrifice I’m willing to make!)
Tariffs, jobs, and industry overhaul
In mid-May, US President Joe Biden announced a series of new tariffs targeting $18 billion USD in imports from China of relevance to “clean” energy, electric vehicles (EVs), and semiconductors. We’ll talk about this part more tomorrow, but just look at some of the White House’s language in the mid-month announcement:
As President Biden says, American workers and businesses can outcompete anyone—as long as they have fair competition. But for too long, China’s government has used unfair, non-market practices. China’s forced technology transfers and intellectual property theft have contributed to its control of 70, 80, and even 90 percent of global production for the critical inputs necessary for our technologies, infrastructure, energy, and health care—creating unacceptable risks to America’s supply chains and economic security. Furthermore, these same non-market policies and practices contribute to China’s growing overcapacity and export surges that threaten to significantly harm American workers, businesses, and communities.
This antagonistic language was not necessary to achieve the tariffs Biden proposed. In the case we’re discussing today, the graphite industry, there really was no industry of which to speak in the US, to be “unfairly” dealt with by international players. China is currently responsible for over 90% of the world’s refined graphite—a key component on almost all EV battery anodes—but that outcome is as much informed by the sheer size of China’s domestic labour pool, and other countries being slow grow their own graphite markets, and the sheer placement of critical mineral deposits around the world, as it is by this sabre-rattling intimation that China “cheated” its way to the top.
But we’ll get to that notion of “unfair” business practices, and the real culprit behind our current struggle to get states to transition their extraction economies, tomorrow.
For now, in this episode, hosts Keith Romer and Sally Held transition from a teaser that introduces the concept of graphite, as an “underdog” mineral essential to EVs, into this plain-spoken mission statement for their coverage:
Today on the show, graphite finally gets its due. We get down on the ground and look at this big supply chain story through the lens of one often-forgotten critical mineral. And we visit a small town that realizes it might be the perfect place to create an American graphite industry if it can figure out a tricky situation with one very expensive pipe.
And that’s exactly what they do!
First, they talk about ambition: the when and where of how China became dominant in overall EV component production, and how the US is now playing catch-up. Again, this part is a bit essentialized (and in a way that vaguely mentions, then skips the real issue for energy markets), but it serves to set the stage for what really matters: driving home what this means for listeners.
Our hosts then situate abstract notions of international policy and mineral market futures in one town: Alex City, to its locals. Alexander City, in Coosa County, East Central Alabama, is part of what used to be called the Graphite Belt—even though deposits there haven’t been mined in some 70 years. The region is home to what the hosts call “the purest, largest graphite deposit in North America”, though, and that makes it the US’s best hope for building a more self-reliant EV industry.
The hosts introduce a company, Westwater Resources, which has bought up graphite rights in the region and then come to Alex City, pitching to build its processing plant there if the town can hustle, and provide it with a few critical components. In particular, the refining process requires a massive wastewater treatment plant, which Alex City already has from another phase in its industrial history. However, the town of 15,000 still needs to build a pipe connecting the treatment plant to the company’s processing planet—at least, if it wants to make the most of this labour opportunity.
And pipes cost money. They take time. They involve material disruptions in life.
Still, Alex City is excited about the possibility of good-paying jobs in the future, so it takes out a massive loan, and builds that giant pipe in good faith. Once the processing plant is up and running, the company will be paying them for use of municipal services, and they can pay back that loan later, right?
Except that, because refined graphite is still such a nascent industry in the US, material experts at the processing plant require months of small-scale product testing in conversation with battery producers to figure out a size and shape of refined graphite that will create the uniform coatings that battery makers require. (Cue more NPR cutesiness around “the potato problem”—but they’ve earned it, by this point.)
On top of which, those same battery makers aren’t lining up to buy local—not when they can still acquire what they need cheaply elsewhere—so Westwater Resources is struggling to make enough deals to keep the momentum going around its original project plan. This is the part of the story that could use more discussion (tomorrow!), but for now, what it amounts to is a huge pain in the neck for the poor local government of Alex City, which is waiting for the graphite refinery to come on line, so that Westwater Resources can start paying municipal fees and the town can start paying back its $9 million loan (plus interest!). None of this can happen, though, while the refinery is waiting on contracts with battery makers, so that it can secure the last $150 million in bank loans that it needs to finish its plant.
And this is where the immediate, everyday impact of Biden’s tariffs come in: jacking up the prices of importing battery-ready graphite from China, to incentivize relevant private industry to buy local instead. Once those battery manufacturers are financially motivated to look for contracts with companies like Westwater Resources, the graphite refinery can get its loans, finish fine-tuning its material specs, complete the plant, and start paying back lil’ old Alex City for its good-faith wastewater pipeline.
The hosts of Planet Money close out this excellent, anecdote-drive tour of our latest extraction economy with one more “big picture” observation, by stressing that tariffs are supposed to be a short-term stopgap for nascent industries. However, to my mind they already made their best point earlier on, when noting that
it's not often discussed, but this is what it looks like to build an industry that doesn't exist. You know, you have to figure out permits. You have to build pipes and roads and whole factories. If the US battery industry wants to compete with China, it is going to take a lot of down-on-the-ground work like this. It might take a lot of new sewer pipes.
When I reflect on how much these hosts managed to cover for everyday listeners (not a rarity for Planet Money episodes, but certainly in top form here), I find myself deeply appreciative of higher-quality financial journalism—because it does make a difference. It trains us to look for the “human” in any money matters we discuss, and to side-eye any approach to journalism that would rather skimp on the material impact.
Biden’s initial tariffs announcement was an especially disorienting read, because it went hard on the foreign policy dimension, using a punitive approach to this financial strategy to whip up a sense of outrage on behalf of the US worker and corporate enterprise—and it didn’t have to. Worse still, making tariffs all about some grand, hegemonic feud between the US and China deeply obscured the everyday material impact of this new policy for everyday US citizens.
And yes, ostensibly, in the abstract these tariffs represent the US’s latest efforts to wean itself off over-reliance on China for the next extraction-based economy.
But in practice, for everyday US citizens in many key parts of this nascent-but-also-fast-growing industrial sector, the ongoing struggle for “clean” energy is going to look more like what was depicted in this episode. It’s going to involve a lot of small towns struggling to onboard new facilities and infrastructure under the dangled promise of better-paying jobs down the line. And citizens need to be prepared for that. They need to know that the possibility of prosperity in a few years’ time might look like a lot of sewage projects here and now. They also need to know that this possibility is part of a delicate gamble between industry and state actors, which might not pay off at all.
In other words: it’s important to remember, whenever we see abstracted financial policies flung about, that the pressures average citizens face while trying to accommodate broader mission statements are no laughing matter. Many places will struggle, and are struggling, like Alex City now is. Many small communities, dreaming big when private industry comes a-calling, are going to be gambling with local budgets and human welfare while helping to bring more extractive enterprise online.
And if the financial news you’re listening to or reading isn’t putting the big picture together? If it’s only giving you market futures stats and quarterly returns? Well, it’s probably doing what it needs to, in service to a gamified financial class that doesn’t really care about the worldly impact of their best-performing assets—but it’s not serving us. It’s not giving us the information we need to advocate most effectively for our immediate communities. So choose your inputs wisely: if the news you follow doesn’t empower you (on or off the running track), why give it the time of day at all?
Be well, be kind, and seek justice where you can.
ML