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Poor Nations Are Writing a New Handbook for Getting Rich

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Economies focused on exports have lifted millions out of poverty, but epochal changes in trade, supply chains and technology are making it a lot harder.For more than half a century, the handbook for how developing countries can grow rich hasn’t changed much: Move subsistence farmers into manufacturing jobs, and then sell what they produce to the rest of the world.The recipe — customized in varying ways by Hong Kong, Singapore, South Korea, Taiwan and China — has produced the most potent engine the world has ever known for generating economic growth. It has helped lift hundreds of millions of people out of poverty, create jobs and raise standards of living.The Asian Tigers and China succeeded by combining vast pools of cheap labor with access to international know-how and financing, and buyers that reached from Kalamazoo to Kuala Lumpur. Governments provided the scaffolding: They built up roads and schools, offered business-friendly rules and incentives, developed capable administrative institutions and nurtured incipient industries.But technology is advancing, supply chains are shifting, and political tensions are reshaping trade patterns. And with that, doubts are growing about whether industrialization can still deliver the miracle growth it once did. For developing countries, which contain 85 percent of the globe’s population — 6.8 billion people — the implications are profound.Today, manufacturing accounts for a smaller share of the world’s output, and China already does more than a third of it. At the same time, more emerging countries are selling inexpensive goods abroad, increasing competition. There are not as many gains to be squeezed out: Not everyone can be a net exporter or offer the world’s lowest wages and overhead.Robotics at a car factory in China. Today, manufacturing accounts for a smaller share of the world’s output, and China already does more than a third of it. Qilai Shen for The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    For Michigan’s Economy, Electric Vehicles Are Promising and Scary

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    Last fall, Tiffanie Simmons, a second-generation autoworker, endured a six-week strike at the Ford Motor factory just west of Detroit where she builds Bronco S.U.V.s. That yielded a pay raise of 25 percent over the next four years, easing the pain of reductions that she and other union workers swallowed more than a decade ago.But as Ms. Simmons, 38, contemplates prospects for the American auto industry in the state that invented it, she worries about a new force: the shift toward electric vehicles. She is dismayed that the transition has been championed by President Biden, whose pro-labor credentials are at the heart of his bid for re-election, and who recently gained the endorsement of her union, the United Automobile Workers.The Biden administration has embraced electric vehicles as a means of generating high-paying jobs while cutting emissions. It has dispensed tax credits to encourage consumers to buy electric cars, while limiting the benefits to models that use American-made parts.But autoworkers fixate on the assumption that electric cars — simpler machines than their gas-powered forebears — will require fewer hands to build. They accuse Mr. Biden of jeopardizing their livelihoods.“I was disappointed,” Ms. Simmons said of the president. “We trust you to make sure that Americans are employed.”Tiffanie Simmons works in Wayne, Mich., at a Ford Motor factory that builds Broncos.Nick Hagen for The New York TimesMs. Simmons’s union has endorsed President Biden, but “I was disappointed” in him, she said.Nick Hagen for The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Hottest Job in Corporate America? The Executive in Charge of A.I.

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    Many feared that artificial intelligence would kill jobs. But hospitals, insurance companies and others are creating roles to navigate and harness the disruptive technology.In September, the Mayo Clinic in Arizona created a first-of-its-kind job at the hospital system: chief artificial intelligence officer.Doctors at the Arizona site, which has facilities in Phoenix and Scottsdale, had experimented with A.I. for years. But after ChatGPT’s release in 2022 and an ensuing frenzy over the technology, the hospital decided it needed to work more with A.I. and find someone to coordinate the efforts.So executives appointed Dr. Bhavik Patel, a radiologist who specializes in A.I., to the new job. Dr. Patel has since piloted a new A.I. model that could help speed up the diagnosis of a rare heart disease by looking for hidden data in ultrasounds.“We’re really trying to foster some of these data and A.I. capabilities throughout every department, every division, every work group,” said Dr. Richard Gray, the chief executive of the Mayo Clinic in Arizona. The chief A.I. officer role was hatched because “it helps to have a coordinating function with the depth of expertise.”Many people have long feared that A.I. would kill jobs. But a boom in the technology has instead spurred law firms, hospitals, insurance companies, government agencies and universities to create what has become the hottest new role in corporate America and beyond: the senior executive in charge of A.I.The Equifax credit bureau, the manufacturer Ashley Furniture and law firms such as Eversheds Sutherland have appointed A.I. executives over the past year. In December, The New York Times named an editorial director of A.I. initiatives. And more than 400 federal departments and agencies looked for chief A.I. officers last year to comply with an executive order by President Biden that created safeguards for the technology.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber?  More

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    Indiana Tests if the Heartland Can Transform Into a Chip Hub

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    Over the past 14 months, Indiana began converting 10,000 acres of corn and bean fields into an innovation park. State leaders met with the chief executives of semiconductor giants in South Korea, Taiwan and Japan. And they hosted top Biden administration officials to show off a $100 million expansion of chip research and development facilities at a local university.The actions were driven by one main goal: to turn Indiana into a microchip manufacturing and research hub, almost from scratch.“We’ve never done anything at this scale,” said Brad Chambers, who was Indiana’s commerce secretary in charge of economic development. “It’s a multibillion-dollar commitment by the state to be ready for the transitions that are happening in our global economy.”“We’ve never done anything at this scale,” said Brad Chambers, Indiana’s commerce secretary.Kaiti Sullivan for The New York TimesIndiana’s moves are a test of the Biden administration’s efforts to stimulate regional economies through the $52 billion CHIPS and Science Act, a landmark package of funding that is planned to begin going out the door in the next few months. The program is intended to bolster domestic manufacturing and research of semiconductors, which act as the brains of computers and other products and have become central to the U.S. battle with China for tech primacy.The Biden administration has promised that the CHIPS Act will seed high-paying tech jobs and start-ups even in places with little foundation in the tech industry. In a speech in May last year, Commerce Secretary Gina Raimondo, who oversees the chips program, said she was looking at how the program would help “different places in the heartland of America.”She added, “I think we will really unleash an unbelievable torrent of entrepreneurship and capital opportunity.”Gina Raimondo, the U.S. secretary of commerce, is overseeing the CHIPS Act program. Jared Soares for The New York TimesThat makes Indiana a prime case study for whether the administration’s efforts will pan out. Unlike Arizona and Texas, which have long had chip-making plants, Indiana has little experience with the complicated manufacturing processes underlying the components, beyond electric vehicle battery manufacturing and some defense technology projects that involve semiconductors.Indiana now wants to catch up to other places that have landed big chip manufacturing plants. The push is supported by Senator Todd Young, a Republican from Indiana, who was a co-author on the CHIPS Act and has been a leading voice on increasing funds for tech hubs. Companies and universities in Indiana have applied for multiple CHIPS Act grants, with the aim of winning awards not only for chip manufacturing but also for research and development.Some economists said the Biden administration’s goals of turning farmland into advanced chip factories might be overly ambitious. It took decades for Silicon Valley and the Boston tech corridor to thrive. Those regions succeeded because of their strong academic research universities, big anchor companies, skilled workers and investors.Many other areas don’t have that combination of assets. Indiana has for decades faced a brain drain among some of its more educated young people who flock to larger cities for work, according to the Indiana Chamber of Commerce. Some industrial policy proponents see the investments as a way to reverse that exodus, as well as a broader trend toward deindustrialization that hollowed out communities in the Rust Belt.But it’s unclear whether the program can achieve such ambitious goals — or whether the Biden administration will judge it to be more effective to spread out investments around the country or concentrate them in a few key hubs.“Many pieces have to come together,” said Mark Muro, a senior fellow at the Brookings Institution. He added that the federal government’s plan to initially put $500 million into tech hubs was too small and estimated it would take $100 billion in government aid to create 10 sustainable tech hubs.Indiana does have some advantages. The state has ample land and water — which are necessary for large chip factories that use water to cool equipment and rinse silicon wafers — and it has relatively stable weather for the highly sensitive production process. It also has Purdue University, with an engineering school that has promised to turn out the technicians and researchers needed for chip production.Yet the state faces stiff competition. In January 2022, Indiana lost a bidding war to Ohio over plans by Intel, the big U.S. chip-maker, to build two factories valued at $20 billion.“We learned a lot of lessons,” Mr. Chambers said about the failure. The biggest, he said, was to have a more attractive package of land, infrastructure and work force programs ready to offer big chip companies.A year later, Indiana won a $1.8 billion investment from SkyWater, a Minneapolis-based chip-maker, to build a factory with 750 jobs adjacent to Purdue’s campus.SkyWater, a Minneapolis-based chip maker, plans to invest $1.8 billion in a factory in Indiana. SkyWaterIndiana beat out four other states vying for SkyWater’s chip facility.SkyWaterState leaders acknowledge that any tech transformation could take years, especially if there is no anchor plant by even larger chip manufacturers such as TSMC, the world’s biggest maker of cutting-edge chips.Mr. Young said he and other state leaders were in talks with big chip makers for a contract that would compare to the $20 billion that Intel committed to Ohio. But “all net new job creation in my lifetime has been created by new firms and young firms,” he said.Indiana’s chip-making metamorphosis is now centered on a tech park, LEAP Innovation District, in the town of Lebanon near Interstate 65, which connects Indianapolis and Purdue in West Lafayette. The town is surrounded by 15,000 square miles of corn and bean farms.The park began taking shape along with the CHIPS Act. In 2019, Mr. Young was a co-author of the Endless Frontier Act with Senator Chuck Schumer, a Democrat of New York and then the Senate minority leader. The bill was the precursor to the CHIPS Act.As the bill wound through Congress, Mr. Young was in regular contact with Eric Holcomb, Indiana’s governor, and Mitch Daniels, then Purdue’s president, on details of the proposal. Mr. Young said Indiana’s manufacturing roots would be its asset, if the state’s factory sector could transition to making advanced chips.“I realized that Indiana and, more broadly, the heartland stood to disproportionately benefit from the investments that we would be making,” he said in an interview last month.Mr. Holcomb and Mr. Chambers then created a plan for a tech manufacturing park. Within months, they began buying corn and bean farms in Lebanon for what became the LEAP Innovation District.In September, Ms. Raimondo and Secretary of State Antony Blinken toured Purdue University’s clean rooms, seen here, for chip research.Kaiti Sullivan for The New York TimesPurdue is also working on a $100 million expansion of semiconductor research and development.Kaiti Sullivan for The New York TimesIn May 2022, Mr. Holcomb unveiled LEAP and began installing new water and power lines and a new road there. Mr. Holcomb, Mr. Chambers and Mr. Young also traveled to more than a dozen countries to meet with the executives of chip companies like SK Hynix and TSMC. They offered cheap rent in the LEAP district, tax incentives, access to labs and researchers at Purdue, and training programs at the local Ivy Tech Community College.Some of the work paid off. When Indiana beat out four other states for SkyWater’s $1.8 billion chip facility, the company said it was impressed by the coordination between state leaders and Purdue’s new president, Mung Chiang, who launched the nation’s first semiconductor degree programs to nurture workers for chip makers.Mung Chiang, Purdue University’s president, has rolled out a semiconductor degree program to nurture chip workers. Kaiti Sullivan for The New York TimesIn September, Mr. Chiang invited Ms. Raimondo and Secretary of State Antony J. Blinken to tour Purdue’s clean rooms for chip research and to see plans for a $100 million expansion of semiconductor research and development, including 50 new faculty to work on advanced chip science.“I think you have all the ingredients,” Ms. Raimondo said in a discussion with Mr. Holcomb and Mr. Chiang during the visit. Indiana officials now await word on how much CHIPS Act funding they may get. Some early results from the LEAP district initiative offer a mixed picture of where things might go.In May 2022, the park landed its first tenant — Eli Lilly, the pharmaceutical company, not a chip maker. More

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    Debt Ceiling Deal Would Reinstate Student Loan Payments

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    The legislation would prevent President Biden from issuing another last-minute extension on the payments beyond the end of the summer.Follow for live updates as the House prepares for a vote on the debt limit deal.For millions of Americans with federal student loan debt, the payment holiday is about to end.Legislation to raise the debt ceiling and cut spending includes a provision that would require borrowers to begin repaying their loans again by the end of the summer after a yearslong pause imposed during the coronavirus pandemic.President Biden had already warned that the pause would end around the same time, but the legislation, if it passes in the coming days, would prevent him from issuing another last-minute extension, as he has already done several times.The end of the pause will affect millions of Americans who have taken out federal student loans to pay for college. Across the United States, 45 million people owe $1.6 trillion for such loans — more than Americans owe for any kind of consumer debt other than mortgages.The economic impact of the pandemic has faded since President Donald J. Trump first paused student loan payments in March 2020. Many Americans lost their jobs at the outset of the public health crisis, undercutting their ability to repay their loans on time. The number of jobs in the United States now exceeds prepandemic levels.Promoting the debt ceiling legislation over the weekend, Speaker Kevin McCarthy said on “Fox News Sunday” that it would end the pause on student loan payments “within 60 days of this being signed.”In fact, the legislation would follow the same timeline that the Biden administration had previously outlined, ending the pause on payments on Aug. 30 at the latest.A spokesman for Mr. McCarthy did not respond to an email seeking comment.Even with the pause ending, some borrowers may still see some relief if the Supreme Court allows Mr. Biden to move forward with a plan to forgive up to $20,000 in debt for some people with outstanding balances.Mr. Biden’s plan would cancel $10,000 of federal student loan debt for those who make under $125,000 a year. People who received Pell grants for low-income families could qualify for an additional $10,000 in debt cancellation.But the plan was challenged in court as an illegal use of executive authority, and during oral arguments in February, several justices appeared skeptical of the program. A ruling from the court could come at any time but is expected next month.White House officials have said repeatedly that they are confident in the legality of the president’s plan. But the debate about the plan, and the broader issue of student loans, has been fierce in Congress.Republicans have vowed to block the president’s plan if the courts do not. But they have so far failed to make good on that promise, despite repeated attempts.Last month, House Republicans passed a bill to raise the debt ceiling that would have blocked the student debt cancellation plan and ended the temporary pause on payments. That bill was shelved after negotiations began with the White House on the debt ceiling and spending cuts.Last week, the House passed a resolution that would use the Congressional Review Act to overturn the president’s debt cancellation plan. But the Senate has not taken up the measure, and Mr. Biden has said he would veto it.Instead, the compromise debt ceiling legislation now under consideration by lawmakers only requires ending the pause on payments — a move that the president had already said he would make. It would not block the debt cancellation plan.In addition, White House officials said the legislation would not deny the Biden administration the ability to pause student loan payments during a future emergency, as Republicans had sought to do.A spokesman for the White House said the president was pleased that Republicans had failed to block his debt cancellation plan in the debt ceiling legislation.“House Republicans weren’t able to take away a single penny of relief for the 40 million eligible borrowers, most of whom make less than $75,000 a year,” the spokesman, Abdullah Hasan, said. “The administration announced back in November that the current student loan payment pause would end this summer — this agreement makes no changes to that plan.” More

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    U.S. Semiconductor Boom Faces a Worker Shortage

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    Strengthened by billions of federal dollars, semiconductor companies plan to create thousands of jobs. But officials say there might not be enough people to fill them.Maxon Wille, an 18-year-old in Surprise, Ariz., was driving toward Interstate 17 last year when he noticed a massive construction site: Taiwan Semiconductor Manufacturing Company at work on its new factory in Phoenix.A few weeks later, as he was watching YouTube, an advertisement popped up for a local community college’s 10-day program that trains people to become semiconductor technicians. He graduated from the course this month and now hopes to work at the plant once it opens.“I can see this being the next big thing,” Mr. Wille said.Semiconductor manufacturers say they will need to attract more workers like Mr. Wille to staff the plants that are being built across the United States. America is on the cusp of a semiconductor manufacturing boom, strengthened by billions of dollars that the federal government is funneling into the sector. President Biden had said the funding will create thousands of well-paying jobs, but one question looms large: Will there be enough workers to fill them?“My biggest fear is investing in all this infrastructure and not having the people to work there,” said Shari Liss, the executive director of the SEMI Foundation, a nonprofit arm of SEMI, an association that represents electronics manufacturing companies. “The impact could be really substantial if we don’t figure out how to create excitement and interest in this industry.”Lawmakers passed the 2022 CHIPS Act with lofty ambitions to remake the United States into a semiconductor powerhouse, in part to reduce America’s reliance on foreign nations for the tiny chips that power everything from dishwashers to computers to cars. The law included $39 billion to fund the construction of new and expanded semiconductor facilities, and manufacturers that want a slice of the subsidies have already announced expansions across the country.More than 50 new facility projects have been announced since the CHIPS Act was introduced, and private companies have pledged more than $210 billion in investments, according to the Semiconductor Industry Association.But that investment has run headfirst into the tightest labor market in years, with employers across the country struggling to find workers. Semiconductor manufacturers have long found it difficult to hire workers because of a lack of awareness of the industry and too few students entering relevant academic fields. Company officials say they expect it to become even more difficult to hire for a range of critical positions, including the construction workers building the plants, the technicians operating equipment and engineers designing chips.The U.S. semiconductor industry could face a shortage of about 70,000 to 90,000 workers over the next few years, according to a Deloitte report. McKinsey has also projected a shortfall of about 300,000 engineers and 90,000 skilled technicians in the United States by 2030.Semiconductor manufacturers have struggled to hire more employees, in part because, officials say, there are not enough skilled workers and they have to compete with big technology firms for engineers. Many students who graduate with advanced engineering degrees in the United States were born abroad, and immigration rules make it challenging to obtain visas to work in the country.Ronnie Chatterji, the White House’s CHIPS implementation coordinator, said that filling the new jobs would be a big challenge, but that he felt confident Americans would want them as they became more aware of the industry’s domestic expansion.“While it hasn’t been the sexiest job opportunity for folks compared to some of the other things that they’re graduating with, it also hasn’t been on the radar,” Mr. Chatterji said. He added that America would be less “prosperous” if companies could increase output but lacked the employees to do so.In an effort to meet the labor demand, the Biden administration said this month that it would create five initial “work force hubs” in cities like Phoenix and Columbus, Ohio, to help train more women, people of color and other underrepresented workers in industries like semiconductor manufacturing.Administration and company officials have also pushed for changes to better retain foreign-born STEM graduates, but immigration remains a controversial topic in Washington, and few are optimistic about reforms.Some industry leaders are looking to technology as an antidote, since automation and artificial intelligence can amplify the output of a single engineer, but companies are mostly putting their faith into training programs. Federal officials have backed that effort and pointed out that funding in the CHIPS Act could be used for work force development.Intel, which announced plans to spend $20 billion on two new chip factories in Arizona and more than $20 billion on a new chip manufacturing complex in Ohio, has invested millions in partnerships with community colleges and universities to train technicians and expand relevant curriculum.Gabriela Cruz Thompson, the director of university research collaboration at Intel Labs, said the company anticipated creating 6,700 jobs over the next five to 10 years. About 70 percent would be for technicians who typically have a two-year degree or certificate.A silicon wafer, a thin material essential for manufacturing semiconductors, at a chip-packaging facility in Santa Clara, Calif.Jim Wilson/The New York TimesShe said that the industry had faced staffing challenges for years, and that she was concerned about the number of “available and talented skilled workers” who could fill all of the new Intel positions.“I am confident,” she said. “But am I fully certain, 100 percent? No.”Micron, which pledged as much as $100 billion over the next two decades or more to build a huge chip factory complex in New York, has also deployed new work force programs, including ones that train veterans and teach middle and high school students about STEM careers through “chip camps.”Bo Machayo, the director of U.S. federal affairs at Micron, said the company anticipated needing roughly 9,000 employees after its full build-out in the region.“We understand that it’s a challenge, but we also look at it as an opportunity,” he said.To be considered for the federal subsidies, manufacturers must submit applications to the Commerce Department that include detailed plans about how they will recruit and retain workers. Firms requesting more than $150 million are expected to provide affordable, high-quality child care.“We don’t think that a company can just post a bunch of jobs online and hope that the right work force shows up,” said Kevin Gallagher, a senior adviser to the commerce secretary.The lack of interest in the industry has been evident at academic institutions. Karl Hirschman, the director of microelectronic engineering at the Rochester Institute of Technology, said the university was “nowhere close” to the maximum enrollment for its microelectronic engineering degree program, which sets up students for semiconductor-related careers. Enrollment averages about 20 new undergraduates each year, compared with more than 200 for the university’s mechanical engineering program.Although students graduating with more popular engineering degrees could work in the semiconductor industry, Mr. Hirschman said, many of them are more aware of and attracted to tech firms like Google and Facebook.“We do not have enough students to fill the need,” he said. “It’s only going to get more challenging.”Community colleges, universities and school districts are creating or expanding programs to attract more students to the industry.In Maricopa County, Ariz., three community colleges have teamed up with Intel to offer a “quick start” program to prepare students to become entry-level technicians in just 10 days. During the four-hour classes, students learn the basics of how chips are made, practice using hand tools and try on the head-to-toe gowns that technicians wear.More than 680 students have enrolled in the program since it began in July, said Leah Palmer, the executive director of the Arizona Advanced Manufacturing Institute at Mesa Community College. The program is free for in-state students who complete it and pass a certification test.In Oregon last year, the Hillsboro School District started a two-year advanced manufacturing apprenticeship program that allows 16- to 18-year-old students to earn high school credit and be paid to work on the manufacturing floors of companies in the semiconductor industry. Five students are participating, and officials hope to add at least three more to the next cohort, said Claudia Rizo, the district’s youth apprenticeship project manager.“Our hope is that students would have a job offer with the companies if they decide to stay full time, but also be open to the possibility of pursuing postsecondary education through college or university,” Ms. Rizo said.Universities are also expanding undergraduate and graduate engineering programs. Purdue started a semiconductor degree program last year, and Syracuse, which has worked with Micron and 20 other institutions to enhance related curriculum, plans to increase its engineering enrollment 50 percent over the next three to five years.Students participated in an event hosted by Micron at Onondaga Community College in Syracuse, N.Y.Benjamin Cleeton for The New York TimesAt Onondaga Community College, near Micron’s build-out in New York, officials will offer a new two-year degree and one-year certificate in electromechanical technology starting this fall. The programs were already underway before Micron’s announcement to build the chip factory complex but would help students gain the qualifications needed to work there, said Timothy Stedman, the college’s dean of natural and applied sciences.Although he felt optimistic, he said interest could be lower than officials hoped. Enrollment in the college’s electrical and mechanical technology programs has noticeably declined from two decades ago because more students have started to view four-year college degrees as the default path.“We’re starting to see the pendulum swing a little bit as people have realized that these are well-paying jobs,” Mr. Stedman said. “But I think there still needs to be a fair amount of work done.”Ana Swanson More

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    Colleges Have Been a Small-Town Lifeline. What Happens as They Shrink?

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    For decades, institutions of higher education provided steady, well-paid jobs in small towns where the industrial base was waning. But the tide of young people finishing high school is now also starting to recede, creating a stark new reality for colleges and universities — and the communities that grew up around them.As Americans have fewer children and a diminishing share of young adults pursue a degree, the once-burgeoning market for college slots has kicked into reverse. Although undergraduate enrollment stabilized somewhat in 2022, it’s still down about 7.6 percent since 2019.“It looks like the future is declining numbers of young people likely to attend college, even in growing areas like the Mountain West,” said Nathan Grawe, an economics professor at Carleton College in Minnesota who studies the demand for postsecondary education. “We’ll start to have some tough stories.”Evidence of a shrinking student body is everywhere in the western Pennsylvania borough of Clarion, population 3,880, which has taken immense pride in the graceful campus of Clarion University since the institution was founded as a seminary 156 years ago.Since 2009, when it had 7,346 students, the university has shrunk by nearly half. With the drop in enrollment has come the loss of nearly 200 staff members, mostly through attrition. Last year, the school even lost its name, as it was merged with two of the 13 other universities in the Pennsylvania State System of Higher Education, creating a multicampus university called PennWest.Tracy Becker, who looks out on Main Street from her broad desk at the city’s chamber of commerce, says there aren’t as many young volunteers for community events like the annual Autumn Leaf Festival, which has been held during homecoming weekend since 1953.“Ideally, I would love to see the university stay and thrive,” said Kaitlyn Nevel, a cafe owner, “but you just have to try and have however many backup plans.”Ross Mantle for The New York TimesKaitlyn Nevel’s cafe used to be staffed mostly with university students; now she has one such employee. As foot traffic lightened, she branched into catering. “Ideally, I would love to see the university stay and thrive, but you just have to try and have however many backup plans,” Ms. Nevel said.As Ms. Nevel’s resigned optimism suggests, declining enrollment doesn’t necessarily spell doom for college towns. Despite the lower student head count, few empty storefronts mar Clarion’s downtown. It has even attracted new businesses like Mechanistic Brewing, which Chelsea Alexander started with her husband in 2019 after moving back from Washington, D.C.Ms. Alexander is one of 28 people in her family to attend the local university. Since 1905, her family has run a clothing shop in town, which sells a line of T-shirts that trade on alumni nostalgia for favorite eateries that have long since closed and for towering dorms that have been demolished. But as graduating classes shrink, even alumni visits will taper off.The State of Jobs in the United StatesThe labor market continues to display strength, as the Federal Reserve tries to engineer a slowdown and tame inflation.Mislabeling Managers: New evidence shows that many employers are mislabeling rank-and-file workers as managers to avoid paying them overtime.Energy Sector: Solar, wind, geothermal, battery and other alternative-energy businesses are snapping up workers from fossil fuel companies, where employment has fallen.Elite Hedge Funds: As workers around the country negotiate severance packages, employees in a tiny and influential corner of Wall Street are being promised some of their biggest paydays ever.Immigration: The flow of immigrants and refugees into the United States has ramped up, helping to replenish the American labor force. But visa backlogs are still posing challenges.Ms. Alexander’s father, Jim Crooks, operates the store, and he has organized local merchants to spruce up the compact main street and market their businesses to potential visitors who may have no such connection to the town.“For many years, the university was carrying a lot of the businesses,” said Mr. Crooks, who has also converted four apartments above the shop from student housing into Airbnb lodgings. “Everybody’s just saying, ‘We can’t depend on the university.’”F.L. Crooks & Company, a family-owned clothing store, has served Clarion since 1905. Two apartments above it have been converted from student housing to Airbnb lodgings.Ross Mantle for The New York TimesAlthough Pennsylvania’s university system had been shrinking for a decade, along with the rest of higher education, it experienced a sudden shock when students disappeared during the pandemic. Among those who noticed: the leaders at the Federal Reserve Bank of Philadelphia, whose territory across Pennsylvania, New Jersey and Delaware has a higher density of colleges and universities than most.Along with large hospital systems, which are often affiliated with universities, educational institutions make up a substantial share of local economies that used to be dominated by manufacturing, logging and mining. Patrick T. Harker, the president of the Philadelphia Fed, wanted to find out how big that share was — since the education and medical sectors were starting to show cracks as well.“Traditionally, ‘eds and meds’ have been thought of as recession-proof,” Dr. Harker said. “This pandemic showed that is not true.”Not all of those institutions are equally vulnerable, however. Rural hospitals have been drying up even as large health care chains build new facilities in fast-growing suburbs, while the dwindling pool of students flocks to state flagships. “They’re stronger than ever, while the regional systems are really struggling,” said Deborah Diamond, a staff economist at the Philadelphia Fed.Dr. Diamond put together a tool that showed how much different regions depended on health care and higher education. The places at the top of the dependence list were predictable, like the Durham-Chapel Hill area of North Carolina, with two powerhouse universities. But they also included smaller areas, like the one surrounding Bloomsburg, Pa., two and a half hours east of Clarion on Interstate 80. There, institutions including Geisinger Health and Bloomsburg University — another state-owned school — make up 21.9 percent of local employment and 18.3 percent of regional income.“As we’ve seen some declines in manufacturing employment, their economic relevance is higher than it’s ever been,” said Fred Gaffney, the president of the area’s chamber of commerce.A local merchant is encouraging others to market to customers without a connection to the town’s university.Ross Mantle for The New York TimesClarion Hospital is the second-largest employer in the county.Ross Mantle for The New York TimesA similar set of factors is evident in Clarion County, where the university is still the largest employer, followed by Clarion Hospital. Walmart comes next, and then a few plants making building materials and prefabricated housing, several social service organizations and the county government. The county used to have more manufacturing, including a large glass plant that closed in 2010. As that receded, so did the county’s population; its labor force dropped to 16,000 in 2022, from about 21,000 in 2008.In the same period, Clarion University’s enrollment began to fall, as did state funding, raising the price of attendance. In 2021, Daniel Greenstein, the chancellor of the State System of Higher Education, proposed forming two clusters of three schools each, to consolidate operations and offer more classes across campuses.“We had to align our costs with our new enrollment numbers,” Dr. Greenstein said in an interview. “We were built out as if we were still having 120,000 students when we had 85,000. You just can’t do that. Like every American family, you have to live within your means.”At the same time, Mr. Greenstein requested more money from the State Legislature to enable the system to freeze tuition and offer more scholarships, which he said was critical to arresting the slide in enrollment. The state increased the system’s base funding by 15 percent in 2022 and threw in $125 million from a federal stimulus measure. The freshman class grew slightly last fall, but not enough to offset another overall drop in enrollment.For the merged schools, swooning enrollment underestimates the degree to which student presence has faded on campus. To bolster their course catalogs, the schools are offering more of their classes online. That allows some students to show up in person only a few days a week — a trend that may accelerate as the system pursues more adult students, some of whom just need to finish degrees or complete shorter certificate programs.Jennifer Fulmer Vinson, Clarion’s mayor, operates an antiques shop in a century-old house reclaimed from a long-gone fraternity.Ross Mantle for The New York TimesClarion’s mayor, Jennifer Fulmer Vinson — another Clarion graduate — sees that as a loss for the borough. History classes come less often to her antiques shop, which sits in a century-old house reclaimed from a long-gone fraternity, stuffed with curios including an old Coke machine and a cabinet full of war medals.“Why are students going to come pay to live on campus when they never leave their room?” Ms. Vinson said. “It’s become more of a ghost town.” (The university says that the first-year student experience is meant to be campus-centered and that most courses will remain in person.)About an hour’s drive west on Interstate 80 from Bloomsburg, the town of Lock Haven also has a university that last year merged with two others in the state-owned system. As the school has shrunk and well-paid staff members have moved away, the state’s substantial tax-free land holdings have started to grate on local residents.Gregory Wilson, the city manager, has created a handout showing what the median property owner pays in taxes to subsidize Lock Haven University: $186 annually.“I think the hope has always been that the investment they’re making to have the university here is somehow returned to them,” Mr. Wilson said. “But that becomes a harder sell as the university becomes smaller.”The contraction has come alongside another recent and unwelcome development: The local hospital, which the sprawling University of Pittsburgh Medical Center bought in 2017, announced in January that it would shutter its inpatient operations, forcing residents to travel at least a half an hour for serious care.All of it has been profoundly frustrating for Angela Harding, a Clinton County commissioner, who says that while she values the hospital and the university, drawing new residents to Lock Haven becomes harder as those economic anchors lose their grip.“I’m sick and tired of having to fight for every single crumb that we get,” Ms. Harding said.Colleges and the towns they occupy can do little about demographic currents. But they should, experts say, reinforce each other — the university can offer space for community functions and support for small businesses, for example, while the town can throw events for prospective students and their parents. Vacant student housing could be converted into homes for new residents who might be able to work remotely or want a quiet place to retire.Tracy Becker, of Clarion’s chamber of commerce, says there are fewer young volunteers for community events than in the past.Ross Mantle for The New York TimesMatthew Wagner, the director of programs for Main Street America, a group dedicated to the development of small downtowns, says he sees less town-gown tension now that municipalities and schools understand their shared fates.“Much like if you had a manufacturer that was facing headwinds, we need to think of the university as an economic development retention program, and direct our assets and resources that way,” Dr. Wagner said.Lock Haven has taken that idea to heart. Its main street is vibrant, with several new boutiques interspersed with longstanding local restaurants. Fabre Sanders, whose father runs a window-treatment store, moved back from Boston a few years ago to start a candy and gift shop. During the pandemic, she said, residents did everything they could to keep the shops alive.“They looked around and said, ‘If we don’t support the local we have, we’re going to have nothing,’” Ms. Sanders said. More

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    U.S. Pours Money Into Chips, but Even Soaring Spending Has Limits

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    In September, the chip giant Intel gathered officials at a patch of land near Columbus, Ohio, where it pledged to invest at least $20 billion in two new factories to make semiconductors.A month later, Micron Technology celebrated a new manufacturing site near Syracuse, N.Y., where the chip company expected to spend $20 billion by the end of the decade and eventually perhaps five times that.And in December, Taiwan Semiconductor Manufacturing Company hosted a shindig in Phoenix, where it plans to triple its investment to $40 billion and build a second new factory to create advanced chips.The pledges are part of an enormous ramp-up in U.S. chip-making plans over the past 18 months, the scale of which has been likened to Cold War-era investments in the Space Race. The boom has implications for global technological leadership and geopolitics, with the United States aiming to prevent China from becoming an advanced power in chips, the slices of silicon that have driven the creation of innovative computing devices like smartphones and virtual-reality goggles.Today, chips are an essential part of modern life even beyond the tech industry’s creations, from military gear and cars to kitchen appliances and toys.Across the nation, more than 35 companies have pledged nearly $200 billion for manufacturing projects related to chips since the spring of 2020, according to the Semiconductor Industry Association, a trade group. The money is set to be spent in 16 states, including Texas, Arizona and New York on 23 new chip factories, the expansion of nine plants, and investments from companies supplying equipment and materials to the industry.The push is one facet of an industrial policy initiative by the Biden administration, which is dangling at least $76 billion in grants, tax credits and other subsidies to encourage domestic chip production. Along with providing sweeping funding for infrastructure and clean energy, the efforts constitute the largest U.S. investment in manufacturing arguably since World War II, when the federal government unleashed spending on new ships, pipelines and factories to make aluminum and rubber.“I’ve never seen a tsunami like this,” said Daniel Armbrust, the former chief executive of Sematech, a now-defunct chip consortium formed in 1987 with the Defense Department and funding from member companies.Sanjay Mehrotra, Micron Technology’s chief executive, at Onondaga Community College in Syracuse, N.Y., in October. The company is building a new manufacturing site nearby.Kenny Holston for The New York TimesWhite House officials have argued that the chip-making investments will sharply reduce the proportion of chips needed to be purchased from abroad, improving U.S. economic security.Kenny Holston for The New York TimesPresident Biden has staked a prominent part of his economic agenda on stimulating U.S. chip production, but his reasons go beyond the economic benefits. Much of the world’s cutting-edge chips today are made in Taiwan, the island to which China claims territorial rights. That has caused fears that semiconductor supply chains may be disrupted in the event of a conflict — and that the United States will be at a technological disadvantage.More on ChinaA Messy Pivot: As Beijing casts aside many Covid rules after nationwide protests, it is also playing down the threat of the virus. The move comes with its own risks.Space Program: Human spaceflight achievements show that China is running a steady space marathon rather than competing in a head-to-head space race with the United States.A Test for the Economy: China’s economy is entering a delicate period when it will face unique challenges, amid the prospect of rising Covid cases and wary consumers.New Partnerships: A trip by the Chinese leader Xi Jinping to Saudi Arabia showcased Beijing’s growing ties with several Middle Eastern countries that are longstanding U.S. allies and signaled China’s re-emergence after years of pandemic isolation.The new U.S. production efforts may correct some of these imbalances, industry executives said — but only up to a point.The new chip factories would take years to build and might not be able to offer the industry’s most advanced manufacturing technology when they begin operations. Companies could also delay or cancel the projects if they aren’t awarded sufficient subsidies by the White House. And a severe shortage in skills may undercut the boom, as the complex factories need many more engineers than the number of students who are graduating from U.S. colleges and universities.The bonanza of money on U.S. chip production is “not going to try or succeed in accomplishing self-sufficiency,” said Chris Miller, an associate professor of international history at the Fletcher School of Law and Diplomacy at Tufts University, and the author of a recent book on the chip industry’s battles.White House officials have argued that the chip-making investments will sharply reduce the proportion of chips needed to be purchased from abroad, improving U.S. economic security. At the TSMC event in December, Mr. Biden also highlighted the potential impact on tech companies like Apple that rely on TSMC for their chip-making needs. He said that “it could be a game changer” as more of these companies “bring more of their supply chain home.”U.S. companies led chip production for decades starting in the late 1950s. But the country’s share of global production capacity gradually slid to around 12 percent from about 37 percent in 1990, as countries in Asia provided incentives to move manufacturing to those shores.Today, Taiwan accounts for about 22 percent of total chip production and more than 90 percent of the most advanced chips made, according to industry analysts and the Semiconductor Industry Association.The new spending is set to improve America’s position. A $50 billion government investment is likely to prompt corporate spending that would take the U.S. share of global production to as much as 14 percent by 2030, according to a Boston Consulting Group study in 2020 that was commissioned by the Semiconductor Industry Association.“It really does put us in the game for the first time in decades,” said John Neuffer, the association’s president, who added that the estimate may be conservative because Congress approved $76 billion in subsidies in a piece of legislation known as the CHIPS Act.Still, the ramp-up is unlikely to eliminate U.S. dependence on Taiwan for the most advanced chips. Such chips are the most powerful because they pack the highest number of transistors onto each slice of silicon, and they are often held up a sign of a nation’s technological progress.Intel long led the race to shrink the number of transistors on a chip, which is usually described in nanometers, or billionths of a meter, with smaller numbers indicating the most cutting-edge production technology. Then TSMC surged ahead in recent years.But at its Phoenix site, TSMC may not import its most advanced manufacturing technology. The company initially announced that it would produce five-nanometer chips at the Phoenix factory, before saying last month that it would also make four-nanometer chips there by 2024 and build a second factory, which will open in 2026, for three-nanometer chips. It stopped short of discussing further advances.Morris Chang, founder of Taiwan Semiconductor Manufacturing Company, at the company’s site in Phoenix in December. The company said it would triple its investment there to $40 billion.Adriana Zehbrauskas for The New York TimesAt the TSMC event last month, President Biden highlighted the potential impact on tech companies that rely on TSMC for their chip-making needs.Adriana Zehbrauskas for The New York TimesIn contrast, TSMC’s factories in Taiwan at the end of 2022 began producing three-nanometer technology. By 2025, factories in Taiwan will probably start supplying Apple with two-nanometer chips, said Handel Jones, chief executive at International Business Strategies.TSMC and Apple declined to comment.Whether other chip companies will bring more advanced technology for cutting-edge chips to their new sites is unclear. Samsung Electronics plans to invest $17 billion in a new factory in Texas but has not disclosed its production technology. Intel is manufacturing chips at roughly seven nanometers, though it has said its U.S. factories will turn out three-nanometer chips by 2024 and even more advanced products soon after that.The spending boom is also set to reduce, though not erase, U.S. reliance on Asia for other kinds of chips. Domestic factories produce only about 4 percent of the world’s memory chips — which are needed to store data in computers, smartphones and other consumer devices — and Micron’s planned investments could eventually raise that percentage.But there are still likely to be gaps in a catchall variety of older, simpler chips, which were in such short supply over the past two years that U.S. automakers had to shut down factories and produce partly finished vehicles. TSMC is a major producer of some of these chips, but it is focusing its new investments on more profitable plants for advanced chips.“We still have a dependency that is not being impacted in any way shape or form,” said Michael Hurlston, chief executive of Synaptics, a Silicon Valley chip designer that relies heavily on TSMC’s older factories in Taiwan.The chip-making boom is expected to create a jobs bonanza of 40,000 new roles in factories and companies that supply them, according to the Semiconductor Industry Association. That would add to about 277,000 U.S. semiconductor industry employees.But it won’t be easy to fill so many skilled positions. Chip factories typically need technicians to run factory machines and scientists in fields like electrical and chemical engineering. The talent shortage is one of the industry’s toughest challenges, according to recent surveys of executives.The CHIPS Act contains funding for work force development. The Commerce Department, which is overseeing the doling out of grant money from the CHIPS Act’s funds, has also made it clear that organizations hoping to obtain funding should come up with plans for training and educating workers.Intel, responding to the issue, plans to invest $100 million to spur training and research at universities, community colleges and other technical educators. Purdue University, which built a new semiconductor laboratory, has set a goal of graduating 1,000 engineers each year and has attracted the chip maker SkyWater Technology to build a $1.8 billion manufacturing plant near its Indiana campus.Yet training may go only so far, as chip companies compete with other industries that are in dire need of workers.“We’re going to have to build a semiconductor economy that attracts people when they have a lot of other choices,” Mitch Daniels, who was president of Purdue at the time, said at an event in September.Since training efforts may take years to bear fruit, industry executives want to make it easier for highly educated foreign workers to obtain visas to work in the United States or stay after they get their degrees. Officials in Washington are aware that comments encouraging more immigration could invite political fire.But Gina Raimondo, the commerce secretary, was forthright in a speech in November at the Massachusetts Institute of Technology.Attracting the world’s best scientific minds is “an advantage that is America’s to lose,” she said. “And we’re not going to let that happen.” More

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    Sam Bankman-Fried’s Parents Under Scrutiny in FTX Collapse

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    The FTX founder Sam Bankman-Fried’s mother and father, who teach at Stanford Law School, are under scrutiny for their connections to their son’s crypto business.At the height of its corporate power, the cryptocurrency exchange FTX convened a group of athletes and celebrities for a charity event in March at the Miami Heat’s N.B.A. arena. Local high school students competed for more than $1 million in prizes, pitching “Shark Tank”-style business ideas to a panel of judges that included David Ortiz, the former Boston Red Sox slugger, and Kevin O’Leary, an actual “Shark Tank” host.But the event’s organizer was a figure better known in academic circles — Joseph Bankman, a longtime tax professor at Stanford Law School and the father of Sam Bankman-Fried, the now-disgraced founder of FTX.Wearing a baseball cap with FTX’s logo, Mr. Bankman walked onstage to help announce the winners of two $500,000 checks. Behind the scenes, he played the role of FTX diplomat, introducing his son to the head of a Florida nonprofit organization that was helping adults in the area set up bank accounts linked to the crypto exchange’s platform. Two months later, Mr. Bankman-Fried promoted the partnership in testimony to Congress, where he was pushing crypto-friendly legislation.In the months before FTX filed for bankruptcy on Nov. 11, Mr. Bankman was a prominent cheerleader for the company, helping to shape the narrative that his son was using crypto to save the world by donating to charity and giving low-income people access to the financial system.He and his wife, the Stanford Law professor Barbara Fried, were more than just supportive parents backing their child’s business. Mr. Bankman was a paid FTX employee who traveled frequently to the Bahamas, where the exchange was based. Ms. Fried did not work for the company, but her son was among the donors in a political advocacy network that she orchestrated.Now Mr. Bankman and Ms. Fried are under scrutiny for their connections to a business that collapsed amid accusations of fraud and misuse of customer funds. No evidence has emerged linking them to the potentially criminal practices that caused the exchange to implode. But their son was arrested on Monday in the Bahamas after U.S. prosecutors filed criminal charges against him, and his fortune has dwindled to almost nothing. The charitable work that Mr. Bankman spearheaded has largely collapsed.The couple’s careers have been upended. Ms. Fried, 71, resigned last month as chairwoman of the board of a political donor network, Mind the Gap, which she had helped start to support Democratic campaigns and causes. Mr. Bankman, 67, has postponed a Stanford class he had been scheduled to teach in the winter, and he’s recruited a white-collar criminal defense lawyer to represent him. The family faces huge legal bills, and they have become the subject of gossip on Stanford’s campus.“I had a friend who said, ‘You don’t want to be seen with them,’” said Larry Kramer, a former dean of the law school and a close friend of the Bankman-Fried family. “I don’t see how this doesn’t bankrupt them.”In a statement, Risa Heller, a spokeswoman for the couple, said that Mr. Bankman worked for FTX for 11 months but that Ms. Fried had no role in the company. “Joe has spent a lot of his life trying to figure out ways to lift people up out of poverty,” Ms. Heller said. “Most of his time was spent identifying worthy health-related charities.”Mr. Bankman-Fried, 30, said in an interview that his parents “weren’t involved in any of the relevant parts” of the business. “None of them were involved in FTX balances or risk management or anything like that,” he said.Mr. Bankman-Fried said in an interview that his parents “weren’t involved in any of the relevant parts” of the business.Stefani Reynolds/BloombergLong before their son became a billionaire celebrity, Mr. Bankman and Ms. Fried were popular faculty members at Stanford, where they have taught since the late 1980s. At their home on campus, they regularly hosted Sunday dinners with friends and colleagues, which multiple attendees compared to a modern salon.A leading taxation expert, Mr. Bankman has been an outspoken advocate for simplifying the tax filing system and has testified in Congress on tax matters. He also has a degree in clinical psychology and practices as a therapist.The Aftermath of FTX’s DownfallThe sudden collapse of the crypto exchange has left the industry stunned.A Spectacular Rise and Fall: Who is Sam Bankman-Fried and how did he become the face of crypto? The Daily charted the spectacular rise and fall of the man behind FTX.Market Manipulation Inquiry: Federal prosecutors are said to be investigating whether Mr. Bankman-Fried manipulated the market for two cryptocurrencies, leading to their collapse.Congressional Testimony: The FTX founder said on Twitter that he would appear before a House committee, but he was quiet about a similar request from a Senate committee. Frantic Exchanges: Texts from a group chat that included crypto leaders from rival companies showed the chief executive of Binance, another crypto exchange, accusing Mr. Bankman-Fried of orchestrating trades to destabilize the industry.Ms. Fried, who retired this year, is an expert on the intersection of law and philosophy, and has written about effective altruism, the charitable movement embraced by Mr. Bankman-Fried that uses data to maximize the benefits of donations. In 2018, she helped start Mind the Gap, hoping to bring “Moneyball”-style analytics to political spending, people familiar with her role in the group said.The couple’s lives transformed after Mr. Bankman-Fried started FTX in 2019. He grew the company into a $32 billion business, cultivating a reputation as a hard-working do-gooder who barely slept and intended to donate his fortune to causes backed by the effective altruist movement.Mr. Bankman and Ms. Fried supported their son’s work, though Ms. Fried expressed concerns about his lifestyle. “The sleep worries me,” she said in an interview with The New York Times in May. “I just hope that it’s not exacting a high price on him.”Mr. Bankman-Fried’s business and political empire was always a family affair. The FTX founder was a prolific political donor, and he was part of a network of contributors who gave money to groups recommended by Mind the Gap, people familiar with the organization said. He also helped bankroll a nonprofit organization called Guarding Against Pandemics that was run by his 27-year-old brother, Gabe Bankman-Fried.Mr. Bankman was deeply involved in FTX. In its early days, he helped the company recruit its first lawyers. Last year, he joined FTX staff in meetings on Capitol Hill and advised his son as Mr. Bankman-Fried prepared to testify to the House Financial Services Committee, a person familiar with the matter said. FTX employees occasionally consulted him on tax-related matters, the person said.“From the start whenever I was useful, I’d lend a hand,” Mr. Bankman said on an FTX podcast in August.Mr. Bankman visited the FTX offices in the Bahamas as often as once a month, a person who saw him there said. Among the much-younger staff, he cultivated an avuncular persona, regaling employees with stories from his son’s youth, the person said. He and Ms. Fried stayed in a $16.4 million house in Old Fort Bay, a gated community in Nassau, the capital of the Bahamas; the couple’s names appear on real estate documents, according to Reuters, though Mr. Bankman-Fried has said the house was “intended to be the company’s property.”Ms. Heller, the couple’s spokeswoman, said Mr. Bankman and Ms. Fried “never intended to and never believed they had any beneficial or economic ownership in the house.”As an employee, Mr. Bankman focused on FTX’s charitable operations. He put together the Miami event, selecting the teams of high school students who competed for $1 million in FTX grants. Mr. Bankman also leveraged family connections to expand FTX’s reach. His sister, Barbara Miller, works in Florida as a political consultant and introduced him to Newton Sanon, the chief executive of OIC of South Florida, a nonprofit organization that helps people with work force development training to promote economic mobility. (Ms. Miller did not respond to a request for comment.)Mr. Sanon worked with Mr. Bankman on a financial literacy initiative for low-to-moderate-income adults enrolled in education programs. As part of the collaboration, students who did not have bank accounts could open one linked to FTX’s platform, giving them the option to spend their money on cryptocurrency. Nobody was pushed to buy digital currencies through FTX, Mr. Sanon said, but one participant chose to do so.In Washington, Mr. Bankman-Fried invoked the Florida program as he pressed for legislation to make the United States more hospitable to the crypto industry, testifying to a House committee that the initiative would help low-income people “build savings.”After FTX collapsed, however, Mr. Sanon informed Mr. Bankman that some participants in the FTX initiative may have lost funds they had stored on the platform (including money students had received as a stipend for joining the program).“They wired money in for us to be able to take care of students,” Mr. Sanon said. He declined to specify the amount that the organization received, but he said it was “substantial and very kind.”Mr. Bankman used his personal funds to cover the losses, according to his spokeswoman. Mr. Sanon said that “none of us are happy with how this played out,” but that “those folks were very good to us.”Not all of Mr. Bankman’s partners were so lucky. On Nov. 11, the day that FTX filed for bankruptcy, Mr. Bankman wrote to a Chicago nonprofit that had been promised $600,000 by FTX’s charitable arm. The money wasn’t going to materialize, Mr. Bankman explained, and he couldn’t afford to make up for the shortfall himself.“I’ll be spending substantially all of my resources on Sam’s defense,” he wrote in an email, which was obtained by The Times.Mr. Bankman-Fried’s whole family has felt the effects of his actions. Gabe Bankman-Fried resigned from Guarding Against Pandemics in November. (He did not respond to requests for comment.) Ms. Fried stepped down from Mind the Gap, which held a meeting last month to elect an interim chair and discuss how to proceed without her, people familiar with the matter said. The stress of the situation is exacting a toll: Mr. Bankman looks as if he’s aged 10 years in one month, a friend said.Mr. Bankman and Ms. Fried are part of a small group offering Mr. Bankman-Fried legal advice, according to a person familiar with the matter. The couple has also turned to the Stanford faculty for support: David Mills, a criminal law professor at Stanford and a close family friend, is part of Mr. Bankman-Fried’s legal team. Mr. Bankman has his own lawyer, the former federal prosecutor Ronald G. White.Colleagues and family acquaintances are wrestling with what to say the next time they run into Mr. Bankman and Ms. Fried. Their son has widely been compared to Bernie Madoff, the notorious fraudster who ran the largest Ponzi scheme in history.Still, many people in the family’s social circle view the situation through a sympathetic lens, according to interviews with more than a dozen friends and colleagues. They insist that Mr. Bankman and Ms. Fried couldn’t have known about any wrongdoing at FTX, while acknowledging that Mr. Bankman may have been naïve in his embrace of crypto.“It’s like a Greek tragedy,” said John Donohue, a colleague who has attended Sunday dinners at the Bankman-Fried home. “The story of flying too close to the sun, and having your wings singed.”Emily Flitter More