Didn't we already cross this particular Rubicon during the auto bailout a decade ago?
Other examples:
> Since the 1950s, the federal government has stepped in as a backstop for railroads, farm credit, airlines (twice), automotive companies, savings and loan companies, banks, and farmers.
Every situation has its own idiosyncrasies, but in each, the federal government intervened to stabilize a critical industry, avoiding systemic collapse that surely would have left the average taxpayer much worse off. In some instances, the treasury guaranteed loans, meaning that creditors would not suffer if the relevant industry could not generate sufficient revenue to pay back the loans, leading to less onerous interest rates.
A second option was that the government would provide loans at relatively low interest rates to ensure that industries remained solvent.
In a third option, the United States Treasury would take an ownership stake in some of these companies in what amounts to an “at-the-market” offering, in which the companies involved issue more shares at their current market price to the government in exchange for cash to continue business operations.
Each example industry continues to require some sort of government intervention to remain solvent at one point or the other. Auto/banks/saving and loans getting bailouts in 2008/2009. Airlines in 2020/2021 due to COVID etc. These industries employ a lot of people and now have become a political hot zone for voters so there is no way to remove these backstops now.
And whether these industries remain competitive globally is another question. Because it is always funny to hear countries accuse each other of propping up one industry or other through government intervention.
Second, these were industry wide bailouts. This action is not.
The genesis of CHIPS Act is a 2020 deal to onshore TSMC. The idea was to further persuade Samsung and Intel to produce chips in US through tax benefits, loan guarantees and grants. But now with US taking a stake in Intel, the strategy for onshoring TSMC and Samsung becomes unclear. Maybe the idea is to use tariffs to make TSMC and Samsung uncompetitive if they don't onshore but that is a bad idea. Because if Intel finds it easier to just coast on "national security" and continue producing last gen chips, they are going to do that and lower innovation even more. This is a win-win for Intel though.
Also, if you are TSMC and Samsung, why bother “on-shoring” to America and not just make Americans pay the tariffs since there are no alternatives and it is unlikely that America can really compete. They will also be fighting the current as BRICS/Asian momentum picks up right in their front yard.
Given with how poorly Ukraine has been treated, why would Taiwan ever think they could easily get an emergency supply of chips for drones and planes exported from the US and past a Chinese blockade?
If Trump or someone similar is in the office I'd expect that there would be demands that the chips stay in the US to protect the country from Chinese aggression unless there is some kind of bribe.
If it happened it would be sudden, like Japan or South Korea having built their own, sending some to their neighbor. It still seems unlikely to me, but it isn't impossible. If China found out before they were installed it would likely instigate conflict. If they did not, I have no idea what would happen. That is an unstoppable force meets immovable object sort of situation.
Impossible. There is no way China will allow that- it would lead to a Cuba situation.
I can't see how this wouldn't favor Taiwan? All the US republicans would start screaming about WW3 etc, it would put major pressure on China. I'd say it would be ideal for Taiwan.
The discussion now seems to be, "How do we get the chips out of Taiwan so we can let it fall to authoritarianism with the least political fall out possible".
Taiwan benefits from the US having access to some additional chip manufacturing to support a war effort and reduce the economic cost of intervening. At the end of the day, Taiwan can resist, slow down China, and make them pay an absurdly heavy price for trying to invade, but US participation is needed to break a blockade and end the conflict.
None of this was ever being done because there an expectation that chips were going to be exported to Taiwan in the middle of a conflict.
Yes, like every other security partner, Trump's immature and inconsistence isolationism makes things worse and unstable. But it was hardly the case that intervention would have be 100% assured under any other President, and it's not the case that that its at 0% under Trump. Improving the odds of intervention, slightly, regardless of who is in office, benefits Taiwan.
Moreover, Putin didn't attack US forces when he invaded Ukraine. There is a significant chance that the PRC would launch a Pearl Harbor style attack on the US and Japan at the outset of a campaign against Taiwan. That dramatically increases the odds of the US being involved in the conflict over the long term. Sure, it's also likely (probably more likely) that the PRC might try more limited form of coercion instead, but one ought to be prepare for the range of possible options.
It is worth observing that one of the major reasons why US conservative China hawks give for not wanting to support Ukraine is because it's not a vital US interest, and they want to focus on preparing for war with China and hopefully deterring it.
It is really unclear you should say why that the Ukraine is being treated "poorly", it is being treated how you'd expect an more isolationist administration who thinks it is a strategic distraction would treat it. The current US administration may well be wrong about this--there's definitely a case to be made that further increasing the cost to Putin for aggression increases deterrence in Asia. But the current administration was very clear in the election about how they felt about Ukraine, and they won.
The argument that unless Trump treats Ukraine "not poorly" no one, anywhere, ever, ought to anything to bend the curve to increase the odds the the US intervening on their behalf seems rather sentimental and unpragmatic.
It seems likely that Taiwan leaders have a better grasp than you do of the strategic choices they are making, and that random feelings about how "poorly Ukraine has been treated" don't enter into it.
If you just hate Trump, it would be easier and more direct to say that, rather than seeming to claim that other people in the world are acting irrationally.
Breaking Russia would mean less money and resources for China and more time for NATO, the thing conservatives seem to think is stupid / unimportant to prepare. It’s probably too late now but the opportunity was there in January.
If there weren’t other players in the game that might be true. As it is, though, the EU is rapidly rearming, and has proven itself to be far more principled and stable in the Ukraine conflict.
I wouldn’t trust a deal done with the USA to be worth anything right now. I would trust a deal done with Europe, Korea or Japan. All of whom would love to have TSMC build a fab in their respective territories.
The EU may be rapidly rearming, but there is no way it will be in a position to help fight off a Chinese invasion of Taiwan in 2027. They won't have the navy. They won't have the force projection capabilities. They won't have the ability to get past China to get assets to Taiwan.
I’m talking about a deal with TSMC to safeguard their production.
Although, between the EU, Japan and Korea there might be enough of an incentive for China to think twice even without the US involved.
There are two countries in the EU that operate nuclear submarines and aircraft carriers. More with conventional subs. Shutting down the sea lanes in that area would be relatively easy for any number of European countries.
One thing that Ukraine (if Iraq and Afghanistan didn’t already) has proven is that it is much harder to win a war for a major power than the posturing would have you believe.
The realistic scenario is that the Taiwanese elite does a deal with the CCP.
America is nobody's friend, at the end of the day China are still Chinese. Americans are xenophobic and racist. Increasingly anti free trade and isolationist.
Also I am incredibly sceptical that the US wants to go to all out war with China over Taiwan. A war they aren't even sure they can win and that REGARDLESS OF OUTCOME will leave Taiwan in ruins.
If the US is poised for full on dictatorship, it makes sense to go in early.
If there will be a change in leadership, it makes sense to wait until the US has weakened every alliance as much as possible under Trump and then invade quickly like what Russia did.
Xi has demanded that China be "ready" in 2027. So he seems to think that China will not be militarily capable of doing so before then. (Or at least he seems to be saying that. It could be a misdirection.)
> That's not something you or anyone else could predict.
You're right: nobody can possibly predict how a nation with no blue water navy, and zero relevant (naval or otherwise) combat experience (ever) might fare against the most expensive, trained, veteran naval combat force in the world - backed by the world's two largest and most expensive, trained, veteran air forces (USAF, USN).
> This would immediately cause a death toll in the millions and a nuclear response would follow.
This presumes that the United States would ever allow a blockade to happen to begin with. The US Navy goes where it wants.
> the federal government intervened to stabilize a critical industry
They intervened to maintain the status quo. Industries are neither stable or unstable for a long period of time without external influences forcing that outcome. Short term turbulence is to be expected and is beneficial for the market as a whole.
They destroy markets and then lie to your face about it.
> industries remained solvent.
How does an _industry_ become insolvent? Only when it's nearly fully monopolized and when there is no difference between an industry and a single entity. This is where we are currently.
> more shares at their current market price to the government in exchange for cash to continue business operations.
Couldn't they just offer those shares to _any investor at all_? Why is the government special here?
CPU manufacturing without any intervention is likely leading towards a monopoly. Every latest generation fabrication facility costs much more than the previous one. Eventually we’ve reached the point where only three companies (Intel, TSMC, Samsung) are interested in making such a large investment.
> Is there some society you know that doesn’t run on greed? … What is greed? Of course none of us are greedy. It’s only the other fellow who’s greedy. The world runs on individuals pursuing their separate interests.
Yes, and altruism doesn't exist, everyone is political, and a whole slew of other nonsense banalizations that pretend that distinctions cannot be made.
> Greed: a selfish and excessive desire for more of something (such as money) than is needed
This definition is quite easy to distinguish ordinary desire from greed. Otherwise you need to render selfish and excessive banal and meaningless as well.
Getting more than needed does not imply that something is needed at all. You can live your whole life without needing to eat a Lychee, but if you eat 1000 of those that is clearly more than needed. A person who never ate a lychee maybe cannot put it into perspective and might suggest that wanting a single lychee is greed, but most people wouldn't find it difficult to see that perspective as extreme. Change lychee for cocaine and you suddenly start getting a different balance.
I know. Per your definition, anyone who desires a vacation to a tropical island is greedy. Or eating at restaurants. Playing video games, renting a movie, eating dessert, etc. How about living on the California coast? People who want to earn more so they can move there are greedy? Or do they simply desire it?
One of my cousins' parents immigrated to the Bay Area, but mine went to the midwest. Am I greedy for desiring to earn income more than a couple standard deviations above the mean so that I could buy land in the Bay Area? Is my cousin not greedy because they were born there?
>Context and our norms is what determines it.
Exactly, which is the problem with trying to distinguish "desire" and "greed". "We" don't have norms. I was lambasted growing up by my grandparents for wanting things that any 1990s kid had in the US, but they didn't have in their poorer country from 1920 to 1940.
> Per your definition, anyone who desires a vacation to a tropical island is greedy. Or eating at restaurants.
It isn't my definition, it's Merriam-Webster dictionary, and I suggest reading the definition more carefully, it really isn't that hard to understand. That is how the word is used.
All of your examples are not selfish or excessive. So not greedy. That it isn't a clear bright line isn't a problem, most judgements in life are not clear cut.
Profit seeking through competition isn’t the same as greed. Greed is the impulse to rig the game once you’ve won a little, so you can keep extracting more without competing. And that tendency from some kinds of people corrodes free market capitalism and its ability to drive innovation and reduce prices. Competition only works if players play by the rules.
And your food analogy works against you. If we extend your analogy, profit is like eating, greed is like overeating. Saying profit = greed is like saying every person who eats three meals a day is a glutton. Competition rewards healthy eating -- efficiency, balance, discipline. Greed is scarfing down the pantry and locking the fridge so nobody else can eat.
> Greed is the impulse to rig the game once you’ve won a little, so you can keep extracting more without competing.
You're making up your own novel definition of greed there, which is certainly cheating when you're saying Milton Friedman is wrong. He was using greed in a more generally accepted sense, ie, a desire for more than one has right now.
There are a lot of greedy people out there who are scrupulously honest. As far as I can tell, the average greedy person should be modelling scrupulous honesty, advocating fair systems and enforcing rule-following behaviours - that is creating the best environment for acquiring capital and maintaining property rights. Greedy people who white-ant the systems sustaining their capital are generally more stupid than greedy.
Newton wrote more about alchemy and theology than he did on physics too. There's a reason why Newton and Smith are primarily remembered in a subset of the fields they worked in.
If you want a dictionary definition, search suggests "An excessive desire to acquire or possess more than what one needs or deserves, especially with respect to material wealth".
On their own neither of those implies any desire to rig games or to avoid competition. Some greedy people do that, but since pretty much everyone is greedy to some extent you find greedy people with every combination of human characteristics.
It's hilarious to watch people try to pretend that "crony capitalism" and "capitalism" are different things, as if the greed to rig the system once you've won is fundamentally different from the greed that pushes you to compete in an un-rigged system.
No, sorry, it's not only the same emotion, it's the same system and the same rules: if greed is good, why shouldn't one seek network effects, platform effects, last-mile dynamics, vertical and horizontal integration that block competition, engage in FUD and dumping and regulatory capture and so on and so on? The answer that the entire business community and an increasing fraction of the general population seems to agree to is that one should, and this has prevented the sort of gardening that can keep the system actually competitive and working for the people, rather than working for the people on top, which is what it overwhelmingly wants to do when left to its own devices.
A typical example here might be something like chess. The primary reason people play it is competition and enjoyment of the game. But there are some who a distorted mentality and simply want to win, even if they're not the one's doing anything, and so you get things like people using computers to cheat. And online chess sites (and increasingly even major over the board events) only work so well by making sure that these sort of people are completely removed from the game.
The desire to compete is somehow not really the same as the desire to win. This is overtly apparent in things like body building. 99.9% of body builders will never compete in a body building show, let alone win, but enjoy the journey that's mostly full of years of self inflicted pain, occasional injury, and endless dedication - largely for the sake of competition and of course what it does to your body. And that latter part isn't really about showing off or sex or whatever, but simply about pride in what you've accomplished - much in the same way one might take pride in their ability to play chess well, or manage a healthy business.
You're splitting stupid hairs here over the exact implication of words in a setting where they don't exactly matter. Whether you call it greed, self interest, a desire to amass wealth, etc, doesn't really matter because for the fat part of the bell curve it's all the same.
since some of the criticisms of Chicago style thinking include blindness to greed and profiteering, or actively promoting them, it would seem more reasonable to argue the criticisms of Chicago school thinking were correct, that Chicago school thinking worked as planned, and this is what we got out of it.
Given that communism is a sci-fi imagining of what the world will look like in the age of post-scarcity, the last point is unquestionably true. We have never achieved post-scarcity. It remains science fiction.
Most imagine post-scarcity will be awesome. While one can never know for sure, for all intents and purposes, the first point is also true. To the best of our knowledge, achieving post-scarcity will be awesome. It is why everyone, even (and in particular!) the USA, is striving to get there someday.
Communism imagines that statehood will come to end, so "countries", in the context of communism, doesn't make sense. It is likely confusing "communism" with "Communist Party".
I mean it really wasn't. Every time a country has tried communism it's fallen straight down the despotism rabbit hole or had the government taken over by officials who wanted a much bigger piece of the pie at the cost of the constituents if you catch my drift.
Communism gives politicians 100% control over the country instead of roughly half like they have in capitalist democracies, So people wont vote for communism because its autocratic.
You never want all power to be in the hands of a single group of people, capitalist democracies separates private from public, so politicians regulating companies are not the same people who are owning those companies. Communism can never work since its an autocratic system with a single player, you need multiple actors.
And yes, in some capitalist democracies company leaders are close bedfellows with politicians, we call that corruption, it isn't like that in all countries.
> Communism gives politicians 100% control over the country
Impossible. Communism has no concept of state (nor money, nor class). That's, like, its defining feature.
Of course, you can't just wish for class, state, and money to go away. They are necessary features of our current world. Communism is the imagined outcome of what happens after we achieve post-scarcity. It is a work of science fiction. Star Trek is a more modern adaptation on the same idea.
> Communism can never work since its an autocratic system
If it were more than science fiction, it is literally the opposite, but, again, depends on post-scarcity. You are likely confusing communism with the Communist Party, who believe in an autocratic system being necessary to pave the way to achieving post-scarcity, with, on paper, a desire to get there.
Maybe a little pedantic. Socialism then, or any existing embodiment of the first stages of Communism. Imposed by force on a population accustomed to another way. Usually accompanied by state confiscation of large businesses, the accompanied corruption, waste and ultimate food riots that often occur. Then a military takeover that's decried as crushing the utopian communist ideal! But actually, just getting everybody fed again.
While the Communist Party does believe in socialism, that does not sum it up either. That would be like trying to tie the Republican Party up in a capitalism bow. They do believe in capitalism, but so does the Democratic Party. Yet they are clearly different parties with some very different ideas.
> or any existing embodiment of the first stages of Communism.
The USA is the country most in the first stages of communism. Its technical innovation has nearly pushed food into post-scarcity territory (some argue it is already there), and it is working hard, harder than any other country, to do the same in other areas of production.
While some of your points resonate with what Trump is doing, for the most part he is an aberration and there isn't yet much indication that he — or anyone in the future — will get away with it.
Chile once democratically elected a marxist to lead the country, and while not technically a member of the Communist Party himself, the Communist Party was part of his coalition. For all intents and purposes, I expect this meets what the previous commenter was talking about. It did not become a dictatorship during that time.
Ironically, it did become a dictatorship after the USA staged a military coup and overthrew said government, but anyway...
You seem mighty confused. Communism is impossible without achieving post-scarcity, and you know full well we haven't achieved that yet.
Communism doesn't exactly promise anything. It is a sci-fi imagining of what the world will look like in a post-scarcity world. Star Trek is a more modern adaptation on the same idea. Would you say Star Trek promises us something? Notably what communism does imagine, though, is that there is no state.
If you read back in the comments, you'll see we're not talking talking about communism at all, rather "communist state". As before, communism rejects the concept of having a state, so you know we cannot possibly be talking about communism. Instead, "communist state" usually refers to a country under rule by the Communist Party. As Chile was ruled by a Marxist inside a Communist Party coalition we said that was likely close enough for what the earlier commenter was trying to convey.
Chile was a technocratic democracy then. Is that paradise? That is in the eye of the beholder, I suppose, but it must have been pretty good else why would the USA have wanted it to dismantle it so badly, undoing what was, at the time, one of the most stable democracies around?
> Didn't we already cross this particular Rubicon during the auto bailout a decade ago?
This Darth Vader style "I am altering the deal, pray I do not alter it any further" gambit is new to the best of my knowledge. If the CHIPS Act had been structured so that it was equity purchases that would be one thing.
The other day I went down a rabbit hole reading about the history of insulin, and learned about the Canada Development Corporation:
>The Canada Development Corporation was a Canadian corporation, based in Toronto, created and partly owned by the federal government and charged with developing and maintaining Canadian-controlled companies in the private sector through a mixture of public and private investment. It was technically not a crown corporation as it was intended to generate a profit and was created with the intention that, eventually, the government would own no more than 10% of its holdings; it did not require approvals of the Governor-in-Council for its activities and did not report to parliament. Its objectives and capitalization, however, were set out by parliament and any changes to its objects decided upon by the Board of Directors had to be approved by parliament.
The CDC was created as a result of Walter Gordon's Royal Commission on Canada's Economic Prospects, and the 1968 Watkins Report commissioned by Gordon, in an attempt to redress the problem of foreign ownership in the Canadian economy by stimulating the development of Canadian owned corporations, particularly in the field of natural resources and industry
About 31,000 private shareholders invested in the corporation. An early purchase of the corporation was Connaught Laboratories, the original manufacturer of insulin.
Major investments owned by the CDC included holdings in petroleum, mines and petrochemicals including Polymer Corporation, an asset transferred to it by the Canadian government. By 1982 the Canadian government had a 58% stake in the Savin Corporation.
In 1986 the Corporation was dismantled as part of the Mulroney government's program of privatization.
Polymer Corp itself is a fascinating origination. Created in ww2 to create synthetic rubber - which the Germans had all of the ip of - it was a wildly successful research to commercialization entity. It was so successful after the war it was considered too important to privatize and it stayed as a crown corp for decades.
I believe they even did a run of $10 celebrating it.
A lot of USA investment in industry falls under defense spending. Canada doesn't spend nearly as much on defense, so has to be creative on how to cultivate domestic industry.
Yes and the scale was far larger, over $80 billion given to GM and Chrysler. GM was majority owned by the US government for a number of years after that too.
Sure, it's been done before, but looking at the end result though, I'm not sure if that's a strong argument for whether it should be done again.
Look at the end state of the US auto industry. It's uncompetitive in basically every part of the world and thus basically irrelevant, except in the US. Unless somehow something different is going to happen here, this could end up with Intel continuing to perform poorly, negating the point of keeping it alive to begin with.
> could not generate sufficient revenue to pay back the loans
I think there's an oversimplification here. Even at 0% interest the government gets returns on those loans. "Death and taxes", right?
Governments aren't people. If I gift you money, that money doesn't come back to me. But if a government gifts someone money, it makes its way back. As long as that money gets spent, there's returns. Even if you die, and even if you don't have that $14m for the death tax, that money still pays dividends back.
The only way it doesn't is if the economy crumbles or that money is taken out of the entire economy (which is much harder to do considering the dollar being the current global currency). So basically you need to light it on fire.
You can do things to slow that flow but it does come back. A low interest loan is just increasing that flow and this is why a negative interest rate can still generate a return. A company can fail and there'd still be returns through taxes in the mean time. The money doesn't just evaporate.
I think a lot conversations about money get weird because we over generalize what money means, applying money's context for an average person more broadly. But money has a very different context when you're talking about governments, corporations, or even billionaires (due to the shear amount). Nor are those examples the same either.
In this case I think it matters. The government already has a stake in Intel, and in all companies. Shares only decrease the pie available to the public while increases the ability for government official to do insider trading and increases nationalization.
You as a person? No. You might spend some of it but good luck spending even a billion. If you put that in some investment account and just get index funds you'll be making money faster than you can spend it, even if you don't do the typical billionaire shenanigans like getting loans that mature upon death.
You as a company? Sure, you can spend a few billion.
What does this have to do with the comment I responded to? Who knows[0]
Yes, but no. The bailout was companies that were headed for bankruptcy. Is Intel? My impression is that they're a lot further from it than GM and Chrysler were.
Intel had been trading below its cumulative physical assets for a pretty long time.
This means the market believes they have a path to bankruptcy. Since markets are forward looking, how close it is to bankruptcy does not matter too much. In this case they needed money and the government provided a relatively low amount for a pretty significant stake in the company.
Intel the advanced IC manufacturer is worth effectively nothing right now.
If they can prove a successful advanced manufacturing process and start making chips on it that will likely reverse fairly quickly, but it's been a decade since they held fab leadership.
Perhaps the government should have required Intel be split into a fab business and a chip design business (as Intel has planned to do itself but hasn't been able to, for reasons). The chip design part can survive on its own without subsidies. Then the government can pump money into the fab business for national security reasons without affecting the chip design market too much.
The problem with Intel splitting is precisely that the fab is worth nothing.
No one will give Intel real money for the advanced fabs, as they are worthless right now. I suspect that's probably the main thing holding Intel back from doing that - they can't get a decent price on the fabs, and just spinning them out directly would probably lead to a fairly immediate failure without Intel's CPU design division funding development without immediate expectation of returns.
If one was a gambling man (with a good helping of pride), you keep the fabs with Intel (where the CPU design division is printing money) and subsidise the fabs and hope they finally stick the landing and start making half-decent chips again.
Intel should have split 15 years ago, ideally, but I'm not sure that splitting now isn't better than not doing it. If they fail to catch up to TSMC, it's possible that the manufacturing branch will drag the design branch down with it.
If they split, it's likely the fab side of the business will need a large infusion of cash in order to catch up (be it in the form of a government bailout or something else), or then they have to accept becoming a second-rate player. For which there is still a large market, so they might actually do decent-ish there. But that pretty much leaves TSMC in a monopoly position.
And, so? Government back then wanted something, government right now wants something (slightly?) different?
The reality is any government (USG included) getting 10% share ownership in a company is ... barely news. The more interesting news (or speculation) is whether this is a smart move or not.
I think that is OP's point though, that when we open the door to things that are different not in kind, but only in degree, then we are likely to always expect the degree to increase
Yes I know that this is the slippery slope but it also accurately describes the trajectory of politics in America at basically every step
“The Chips Act wasn’t about raising revenue, and an equity share wouldn’t enhance national security.”
Every generation of fab is increasingly expensive. TSMC has over 500 customers, including Intel. Intel basically only has Intel to pay for those $20 billion fabs.
My intel powered workstations from 2008 have chips that are more than decent enough for modern computing.
But in reality, they gave up on R&D, Missed Apple mobile chips and then put a lot of MBAs in top leadership positions to make their financial schemes work. Those schemes did not work and they were left without technical leadership. When they got the tech leadership, the board just gave up and fired him and brought in a chop shop CEO to part intel out.
For some reason, the US admin thinks this is a good buy. You probably would too, if you bankrupted multiple casinos.
Intel is going the way of SunBeam, Sears and Toys r Us. The board failed to stop that. And failure attracts more failure.
I have a Core 2 Quad machine around from 2008 for nostalgia reasons and retro computing, and even with a modern lightweight Linux on it, it's definitely not enough for modern computing unless what you consider modern computing is writing text documents and viewing websites ... slowly, and for that it's extremely wasteful since it has a 95W TDP while a 2W modern smartphone/tablet can do that even faster and more efficient, plus it's also portable.
Having to do any kind of 2025 type of work on it would be testing my patience to the extremes because all SW and media has grown in size and/or complexity(AV1 encoding, etc) requiring faster CPU, GPU, storage and RAM for the optimum experience. The only things that run fast on it are period accurate Linux 2.6 and Windows XP with websites form 2008, but I wouldn't call that modern computing.
Computers have gotten night and day faster and especially more efficient since 2008, pretending otherwise would be in bad faith.
New computers aren't as much faster as benchmarks would lead you to believe. If your code relies on unpredictable branches, dependept memory accesses in a tight loop, or very tight feedback loops inside computations, new CPUs won't have that much of an edge.
I'm writing rendering engines, so quite up to speed on how fast CPUs and GPUs are, where the bottlenecks are etc :) In fact I worked on the latest Cinebench as part of Redshift dev.
Ah sorry, didn't mean to sound so haughty, I really just quickly type these comments off before I start my workday, really should give more thought to sounding a bit more tactful.
It's really cool they you get to meet people like you here in the comments :)
However I think the video raises an interesting point - I imagine you're an expert on modern CPU optimization, and spend quite a bit of time thinking about cache access patterns, exposing instruction-level parallelism to the CPU and other such gory bits without which your code wouldn't be running as fast on modern CPUs.
Most of us regular folks however don't really write code like that, and I think for that sort of code, I don't think modern CPUs run as much faster than an ancient Core 2 Duo, as benchmarks would suggest, but we can expect results somewhat more like in the video I linked.
Congrats on your work getting used in Cinebench, but I can't help but ask you - what's your thoughts on your work getting used to basically benchmark every CPU under the sun by tech reviewers, who then make recommendations on whether to buy that CPU or another one. Looping back to the previous point, I think your code has quite likely very different performance characteristics than the sort of generic stuff most people end up running, and this sort of benchmarking creates an incentive for manufacturers to crank out CPUs that are good at running hyper-optimized path tracing code, while ignoring real-world performance. What are your thoughts on that?
as a counterpoint, I did all of my rust contributions including creating rustdoc on a $300 walmart laptop w/2GB RAM my parents got me in december 2007. you just work differently when that’s your tool :)
It seems we need a system where these failures are visible earlier. If you consider the current economy a strategy game, our game dynamics incentivise bad short-term optimisation.
We can blame the MBAs, but we really should see how we can propose a better system. And then convince people of that.
We often fail to realize how cutthroat the chip business is and how many bad decisions away from oblivion all players are. It’s just that Intel is more exposed to those risks because it’s both design and foundry making risky bets.
OTOH, if TSMC makes a couple bad bets in a row, all their 500 clients will be in deep trouble.
The current lowest speced Mac can absolutely dominate my previous 2012 2x20c ivy bridge era Xeon tower. And on top of that, the power and heat are drastically less with the new machine.
The only reason a system of this era even kept up is the years Intel just didn’t do anything that was that much better and because of ram and pci express expansion which allowed for upgraded faster storage and faster gpus.
These days I can get better performance in a system that I can hold in my palm (Apple m4, amd ryzen ai 9) that doesn’t produce enough heat to keep my entire room toasty in the winter.
>But in reality, they gave up on R&D, Missed Apple mobile chips and then put a lot of MBAs in top leadership positions to make their financial schemes work.
> They got incredibly lucky with IBM choosing the 386 for the PC platform...
1. IBM picked the 8088 for the PC platform. This was part luck, part Motorola being too slow to market with the 68k.
2. The first PC with an 80386 was made by Compaq, not IBM.
3. A big part of what held OS/2 1.x back was IBM insisting on it working with the 80286, which made properly supporting DOS programs challenging. OS/2 2.0 came out 6 years after the first 386 based machine from Compaq.
> Itanium was a flop from bad business decisions IIRC.
Itanium was a flop from a technical standpoint but not from a business one. Intel spent roughly a gigabuck and effectively scared every competitor out the pool except for IBM and AMD.
Intel is suffering because their old fab folks all retired, and no young, smart engineer over the last 20 years wanted to work for any semiconductor company let alone Intel.
> Itanium was a flop from a technical standpoint but not from a business one. Intel spent roughly a gigabuck and effectively scared every competitor out the pool except for IBM and AMD.
Even without the Itanium, the economies of scale in the x86(-64) world would have driven the RISC vendors out of the game.
True, but who knows how much later that would have happened, and how the market would have looked by then.
The false information about the future of Itanium scared almost all of them to surrender, about in the same way as the fictional Strategic Defense Initiative had scared the Russians.
Sure, the details would certainly have been different, but my argument is that the end result would not have been that different from what we saw playing out.
My quick 5 cents for what might have happened in the interim:
- Without a separate high-end offering in the form of the Itanium, Intel is quicker to adopt x86-64, and produce high-end server chips with extra RAS etc. features.
- POWER and SPARC, being the last holdouts in the RISC market in our actual timeline and outliving Itanium, would likely not have been affected much wrt. Itanium existing or not.
- SGI with MIPS would likely have been the first one to fold. Would SGI have pivoted to x86-64 & Linux sooner than they historically did, or would the company have gone bankrupt first?
- HP/Compaq with PA-RISC and Alpha is perhaps the most interesting question. HP did a lot of early VLIW/EPIC research with an eye towards developing a successor to PA-RISC. Would they have thrown that R&D away and selected to focus on either PA-RISC or Alpha after failing to secure Intel as a partner in the Itanium? Or would they have tried to develop something Itanium-like without Intel?
Another interesting what-if, if Itanium didn't exist, would instead 3rd-party manufacturing of high end chips (similar to TSMC today) have been developed sooner than historical? Keeping in mind that a large reason for the Itanium was accessing the semi process R&D and chip manufacturing prowess of Intel, as the thinking at the time was that tight (vertical!) integration of the chip design and manufacturing was a requirement for the highest end CPU's. And it was the spiraling costs and volume required of chip manufacturing that was the boat anchor around the necks of the RISC vendors moreso than the chip design itself.
Intel fell behind TSMC around ten years ago and the resulting malaise—still not fixed—almost put them out of business. So yes, they needed a bailout and got one.
Typical story of the one of many products of globalism where the standard traditional definition of monopoly has been nullified by it's massive supply chain spanning countries.
That's where the comparison with the auto bailout in the wake of the financial crash falls apart.
Intel got no bailout. The government demanded 10% of the company for financial grants that Intel already received, largely under the Biden administration, under vehicles like the CHIPS act (you know -- the massively successful policy that is the actual reason that a bunch of latest tech chip plants are being built in the US). It's an absolutely bizarre situation, and the only reason Intel would even go along with it is that this administration operates like an extortion racket and would somehow cripple the company otherwise.
Did you also oppose the government stepping in when Silicon Valley Bank collapsed? The FDIC had a clear upper limits. It shouldn't have paid depositors more than that.
The problem here isn't that the government gets involved in businesses. That has always been something they do.
The problem is that these days they do it capriciously, without any sort of plan or intention.
The government played a foundational role in supporting the early stage research that enabled companies like Intel to emerge. Underwriting that sort of long-term investment that wouldn't easily attract commercial capital is a great place for them to be.
Meanwhile, is it even the case that the American chip industry is declining? Apple, Nvidia, and Google all have significant chip manufacturing operations. And this isn't an industry I even follow particularly closesly.
> Apple, Nvidia, and Google all have significant chip manufacturing operations
No, they all (as well as AMD) all have significant chip designing operations. Not one of them can actually fabricate their own chips. Every single one of them must speak to TSMC or Samsung if they want to take their designs from the whiteboard to the physical world.
Thanks for clarifying! I misspoke there, but from my standpoint (portfolio manager/equities investor) that's better.
Wafer fabs are capital intensive, complex, and need constant retooling. The bulk of the commercial value lives in the stuff you do on your whiteboard.
From a geopolitical standpoint, I'll concede there's value in having the ability to actually make the stuff without acceding to the duopoly. But I'd still rather see the capital invested in basic research which might change the capital dynamics of the industry in the intermediate to long term.
> Thanks for clarifying! I misspoke there, but from my standpoint (portfolio manager/equities investor) that's better.
From a national security point it really, really isn't. Like, I'm not a fan of the Trump administration, but having basically all chip manufacturing in Asia is not a good idea if you think there'll be a war with China in the next few decades.
Another commenter already noted the CHIPS[1] act, which was a deliberate act to try and specifically bring fundamental high value chip manufacturing and science to the United States.
It is extremely relevant to this conversation. Regardless of whether you think China engages in a war with Taiwan, it is a crucial resource the US will want developed locally (similar to any critical resource like farming, steel, or rare earth metals).
CHIPs seemed more well thought out than simply taking control of 10% of Intel.
>but having basically all chip manufacturing in Asia is not a good idea if you think there'll be a war with China in the next few decades.
I see this a lot, but I’m not smart enough to understand it.
The US still has immense military power. Is the suggestion China/Asian is going to make the US so desperate for lack of chips that they use this power? Whether the manufacturing plants exist in Texas or Taiwan, the US military basically ensures they exist. And if that supply is cut off and that is forecasted to be the turning point of a war, then with a figurative push of a button, the US military makes sure that other countries also don’t have chip manufacturers (i.e. blows them up). Similarly, other countries can target plants on US soil if war breaks out anyways.
I don’t see a war coming to that point or to the US losing access to chip manufacturing because of one. What don’t I understand from this angle?
That said, I do think it’s important for the US to have their own chip manufacturing on shore. Not as some protective measure over some combat war, but (1) to ensure less possible influence from foreign governments and decrease likelihood of possible backdoors or intentional sabotage and (2) to protect against other factors from shutting down the facilities, like natural disasters.
What happens if the PRC annexes Taiwan without bloodshed?
The options available to the US are: attack the PRC to blow up the chip manufacturers and probably start WW3, or frantically try to replicate the capabilities of the Taiwanese fabs before the PRC decides to cut the US off.
In the meantime, the PRC will have immense leverage over the rest of the world, and there is no scenario where they don't extract as much as they can from that advantage.
I’d rather prepare for life with China in total control of Taiwan than try and defend Taiwan from China. I believe they will take Taiwan without bloodshed, anyway. Which is why it is critical to build up the US advanced manufacturing base. It will take a long time and cost a lot of money.
I believe the US government agrees with you, which is why they are investing in domestic alternatives to TSMC (including encouraging TSMC to build a plant in the US).
I don't think it's likely to happen, but it's certainly an option I would prepare for if I were the US government.
As to why the US would allow it to happen, the PRC could take steps that would make the defense of Taiwan politically undesirable to the US (threatening biological warfare is one example that comes to mind).
I am not sure what you are trying to say? That the US can simply press a button and end a conflict with China? China has been posturing forever on Taiwan being a part of China. They love to show of bridges and boats that would be able to facilitate a land invasion. We have already seen how quick China integrated HK. It is not a nonzero chance that China makes a move on the US. If that happens, where are the chips coming from. It’s smart to want to increase geographical diversification for something that is used in almost all tech products.
>China has been posturing forever on Taiwan being a part of China.
And yet they continue to just posture instead of doing it.
The US does maintain a small military presence in Taiwan already.
Answer me this: if the US is so heavily dependent on Taiwan _not_ being part of China, then why would they let them take it?
US bringing chip manufacturing in country weakens Taiwan’s position and only then will China take it, when it feels safe from retaliation from the US.
They maintain a small military presence? Not really, there are no bases and last report in March was 500 US military trainers. I would not really classify that as a military presence.
If China wanted to take Taiwan today? Honestly not sure what would happen. Maybe the US intervenes, maybe not. I am not even sure how I feel about either side. What I do feel strongly about is that it’s best both for the world and the US to reduce chip concentration from Taiwan. I believe in comparative advantage but also believe sometimes it’s useful to guide the invisible hand when there are crucial industries. I don’t even know how I feel about China. They have done amazing things in lifting their country, especially when compared to close neighbors like India but also I never can get a good feeling for their intentions as they play a much longer game than most of the West.
War with an actor like China would not be pretty. Their country has seen no real conflict so there is question about battle readiness but missles and drones don’t need much training and I personally don’t want to test it. So while yes I don’t think China is making a move today, I also believe it’s a highly complicated problem for its concentration risk, maybe they make a move tomorrow and the world is reliant on China for chip manufacturing.
There is a 0.00% chance that the US does not intervene. That’s why we have a small presence there and a large presence in Japan. And that’s why China has not yet taken Taiwan.
I think this is where youre missing it
> The US still has immense military power.
Because this isnt true anymore and its been proven over and over in the past few years. As industrial power goes so does military and the US military is showing huge cracks while facing 3 massive wars in the pacific, ukraine, and middle east. Its already admitted it cant protect all 3.
The chinese just this week shut down the entire US auto industry because of rare earth if they blockade taiwan how long until they win that.
This is quite a naive take, sorry to say. It is absolutely true that a war is brewing in East Asia, part of the explicit intent being to control other countries' chip usage. This is the same sort of argument that was used during World War I when the major powers said there'd never be a war on the continent because every country was interconnected in commerce and culture, and well, it turns out that reasons for war aren't always rational.
You explained the issue perfectly we are moving past a age and time where we care what portfolio mangers/equity investors want. The point is to do things those investors hate but benefits the US government which you explained they wont do without force.
If you can't manufacture your chips while your only geopolitical rival is pumping infinite money to homegrow their own fab business, it probably should cause some concern.
If the only source of high quantity and high quality chips is located in your competitor's backyard, and they spent several decades repeating how it's their wayward province that they fully intend to reclaim one way or another, it's pure stupidity to sit around and do nothing.
Let's not pretend that the money would be spent on basic research instead, by the way. US pumping some money into chip production is a rare spark of intelligence amidst an avalanche of stupidity and grift.
If I don't know something, I don't make statements such as "Apple, Nvidia, and Google all have significant chip manufacturing operations..." a bit of humility goes much longer way than this.
Which American companies manufacture chips on the latest node? Certainly not Texas Instruments, Global Foundries and one might even argue Intel, compared to Samsung and TSMC. It is a matter of national security that Intel not fail.
What government or military things use anywhere near the latest node chips though? I thought all that stuff usually uses really old chips, because that stuff only changes like once every couple decades.
The government wants to build AI data centers and I'd assume they're not using decades old nodes to do so. There is always a use case and therefore national security interest for the latest nodes.
It is a matter of national security that state-of-the-art fabs exist within the nation and that the expertise to operate them also exists within the nation.
As you point out, it is questionable whether Intel has either of these.
It might be argued that it is critical to national security that Intel be replaced by HP. Or Nvidia. Or Sun, or Motorola, or Micron, or TI, or...
What's that you say? Most of those companies had their chance and failed? None of those companies are really in the game?
Why among all the list of failed or current fab owners is it so important that Intel be declared sacred?
Why not recognize that Intel is getting its clock cleaned by a company that doesn't design chips? Why not look outside of the chip design industry to save the chip fab industry?
The bet seems obvious - Intel has been failing for a while, but they're still much better positioned to produce what the US government wants than some random companies like HP or TI. Their fabs aren't quite on the bleeding edge and the yields aren't quite what they'd like to have but it's still much more advanced than TI's 45-250nm fabs.
If HP, or Nvidia, or Sun, or Motorola wanted the bag maybe they should've tried building their own modern fabs.
Because Intel is the only player left. What do you mean look outside the chip design industry to save the chip fab industry? It takes a very long time and lots of money to spin up a new state of the art fab, while Intel already has it mostly set up.
> Why among all the list of failed or current fab owners is it so important that Intel be declared sacred?
Has TI ever made anything nearly as complex as CPUs? Has NVIDIA? (Hint: the answer is "no"). Intel is pretty much the only option, though ChatGPT suggests GlobalFoundries as a potential other option (spun out of AMD).
Intel is definitely special in that it's the only truly American fab.
I don't have a problem with a US government owning a stake in Intel given its massive strategic importance, but I have a problem with this government owning a stake in Intel given its brazen corruption.
> Unlike grants, equity comes at a steep cost to Intel. Transferring grants into equity therefore risks putting Intel at a cost disadvantage relative to other chip makers
A lot of this article seems to rely on this point but the possible cost isn't clarified. I can understand equity arrangements affecting shareholders but how would it reduce the product's competitiveness, notably the unit cost which seems to be the point regards to other chipmakers. If it's about stock price going down, employee comp going down and product effects from that, it seems too speculative?
On the flip side, it sounds like instead of cash over time it becomes a lump cash infusion, which seems like it could result in benefits of its own such as bringing forward timelines.
<< how would it reduce the product's competitiveness
It wouldn't. It is an opinion piece. On that basis alone, knowing what we know about media landscape, it exists as a means of forming opinion and allowable argumentation for the issue at hand.
If that premise is accepted then the piece is there to protect the poor shareholders, who until now were thinking Intel will be getting 'free' government money, but suddenly found the cost of government involvement may be higher. Suddenly, that is a bridge too far. You can grant them money, but, good heavens, think of what you will do if you demand that we give you equity of said money..
I mean.. sure WSJ intended audience, who is bound to nod on 'productivity' line of argumentation, but people with a sense of Intel history ( or most US industries that offshored and now talk reshoring for that matter ) might chuckle at the hutzpah.
this is the logical conclusion of outsourcing: we kept giving away the low end electronics and now we can't compete on the high end w/o government subsidy
the supply chain moved to asia and the just so stories about ricardian free trade + an inflated stock market made everyone believe, while the ultra-rich got ultra-ultra-rich
and now we sit down to our banquet of consequences
From my pov, it looks more like intel shit the bed repeatedly.
Missed on: mobile, custom chips in the data center, graphics cards, ai, and building out fab services they can sell.
Meanwhile, they took at least 5 years off of making their chips faster, and we're treated to the absurdity that the m-series chips are as performant in single core as anything Intel can build on a power budget 1/10th of Intel's.
I'm not sure what that has to do with outsourcing? It looks more like a comprehensive lack of execution.
Intel should have spun out their fab in 2009-2010 when the signs were clear: Mobile was taking off, AMD spun out their fab, Intel had missed the boat on mobile CPUs, and Apple had acquired PA Semi and was investing heavily in custom silicon.
High-end fab is a volume game and that was the time frame when Intel was still process competitive and could have competed for Apple's business (and Nvidia's, ...). But that would never happen as a division of Intel, nobody wants to send their designs to a competitor.
Thats such a rear view mirror take. I am not in this industry but it was obvious Intel had a manufacturing advantage back then and this let them be the dominant player in this space for decades. High margins and they were the only game in town for the x86 in most key markets (AMD was just a cover for antitrust cases).
Even 10 years ago Intel was a blue chip stock, saying they should have cannibalized their lead to go into a lower margin market for volume would have gotten you kicked off any executive role.
Imagine being in a boardroom in 2010:
- You're printing money with 60%+ gross margins
- You have a 2-3 year process lead over everyone
- Your R&D budget dwarfs competitors because of your integrated model
- PC sales are still growing and servers are booming with cloud build-outs
- Also you are betting that Apple is going all in on your foundry to drive the volume and R&D
And someone proposes: "Let's split the company, cut our margins for a bet against our design team in mobile volume, and start manufacturing chips for companies that might become our competitors."
You're probably right; either that or beat Qualcomm/Samsung at providing the non-Apple chips. As rafaelmn points out, 2010 may be premature, but by 2015, they should have understood.
How they fiddled and watched Apple take the phones that make a profit; Samsung/Qualcomm provide chips to the rest; and all the hyperscalers make their own arm chips in the data center while doing nothing. Absolutely nothing. Is beyond comprehension.
Meanwhile, (I think Asianometry?) pointed out that Intel's headcount was recently as large as AMD, nVidia, and TSMC combined.
Intel was (is?) the largest sponsor of EE H-1Bs. Most such people coming from two countries where it's practically impossible to win the green card lottery. The upshot of that is a massive brain drain when these people have to leave.
You have no idea if those Indians are here on a visa, greencard, or have American citizenship.
You just see brown people, some of whom may or may not have accents, and are angry they’re making “six figure salaries” while people you define as Americans (I wonder how your Americans look like) are “struggling to put food on the table.”
I am not one of these people who spend their lives on Twitter or Bluesky or whatever calling everything under the sun racist. But your comment here is actual racism.
IMHO Let Intel fail. Their fabs can be bought in bankruptcy by other chip companies that may be better run. Granted, a lot of those companies are currently fabless, but how many would change that with equipment bought at a fraction of the cost? TI, Micron, GF all have fabs. Qualcomm strikes me as a fabless that might give it a shot. I'm assuming the people and know-how would come with the fabs of course.
There are a lot of times where I'd say a business should be allowed to fail - but this is a poor choice to do so.
* You can't just spin up leading edge semiconductor manufacturing on a dime. It takes decades and hundreds of billions to reach where companies like Intel and TSMC are now. It's so hard that it's essentially impossible for new entrants to catch up.
* The US has a strong interest in having local manufacturing, that no other power could take away in a time where it's needed.
>a lot of those companies are currently fabless, but how many would change that with equipment bought at a fraction of the cost?
Zero. Dumping the fabs on them would not help them. They're expensive and complicated to run. They don't have the knowledge to run the fab side of design (it's a joint effort on both sides to design a chip), nor the money or knowledge to improve those fabs and keep them up with the leading edge.
> You can't just spin up leading edge semiconductor manufacturing on a dime. It takes decades and hundreds of billions to reach where companies like Intel and TSMC are now. It's so hard that it's essentially impossible for new entrants to catch up.
You can if intel goes bankrupt.
Why do people act like a bankruptcy consists of taking all the employees out back and putting them down then setting all the buildings on fire.
It's hard to retain knowledge and processes in a bankruptcy. Even if you manage to get ALL the equipment and the people back (far, far from guaranteed) sometimes you've broken the systems that let it work in the first place.
(Not that Intel's has been working particularly well, as of late)
I would agree with your approach if we were simply discussing whether the government should fund intel, but we’ve already committed to funding intel via the government. Pulling back would hurt intel and our interests. Now that intel has become reliant on our promised funding, it makes sense to attach conditions to the funding we need to do instead of just handing it out while getting nothing in return.
The first thing that jumps out is that it is impossible to avoid the absurd juxtaposition of a republican led major national corporate stake, after a decade of the auto bailouts being used as a poster child of policy that the current party in charge doesn't agree with.
Moving on from that, you make a good point that it may be the best compromise if the original deal is off the table. That said, in my eyes the implementation could be better. On both a practical and ideological level, I think it would behoove the dealmakers to lay out clear exit conditions. That could look something like anything from signing a covenant with Intel to freeze dividends and corporate buybacks and pay down debt (which is dangerously high for them currently), and then once the corporate balance sheet gets to a safer level, the US gov could run a public auction for the equity once that strike level is hit. I'm sure they could come up with something palatable. What's unexcusable is to apparently enter into a seemingly permanent zone of CCP-style state corporate capitalism without clearly laying out what that means for America going forwards. As an average citizen, I certainly have questions about the precedents being set, and to me it just looks haphazard and off-the-cuff.
> The first thing that jumps out is that it is impossible to avoid the absurd juxtaposition of a republican led major national corporate stake, after a decade of the auto bailouts being used as a poster child of policy that the current party in charge doesn't agree with.
The only absurd here is to think republicans care about anything other than power . Doesn't matter what they did or said yesterday, what matters is what can they say and do today to remain in power and enable their deep pocketed donors to make more money and gain more power.
People really have to stop thinking there's anything there, there's nothing, its all about acquiring and using power. Trying to come up with ideological reasons as to why they do this or that is useless.
>The only absurd here is to think republicans care about anything other than power . Doesn't matter what they did or said yesterday
Right, but it's an absurd juxtaposition when taken at face value none the less. I agree with what you said, but my point was more about other possible structures for the deal rather than political conclusions. I was attempting to brush aside the political considerations and take a somewhat tabula rasa approach, not spur a partisan political conversation, which clearly I failed at by mentioning the absurdity in messaging.
Pray that before 2026, you won't have had any DOJ approved FBI raids to Trump political enemies.
How I guess it will happen: first target 'close ennemies': same party, small public recognition, but opposite views on specific policies you want to denounce. No charge filed, just good old intimidation: raid the home, take the files an computer, then say "sorry we didn't find anything" after a few months.
My mother hosted political refugees from Russia and Kazakhstan, I've heard a lot of story, and that shit seems to always starts the same way.
But you're spot on -- John Bolton is a long-time Republican war hawk, small name recognition, differing views on many specific policies (came out against Trump during his first impeachment), home raided by FBI under vague implications, boxes taken, computers taken.
In Kazakhstan, it was a power play to designate a new common enemy (in the case i know, Orthodox christians). The man was close to the president but fell in disgrace. It was used to quell the protests (i was an adult when this happened, so probably after 2009, i'll have to look), and the group that supported him, the Orthodox church, fell with him as public ennemies (it was also racism/ethnicism because most of the orthodox were ukrainians/Cossacks displaced under Staline during the famine, and looked quite different than ethnic Kazakhs). Basically fascistic behavior.
The refugees i've met were all part of the church, so the purge hit a lot of people. Not sure if it worked, after all, i think they changed president recently, but i'm definitely not an expert on the area.
In Russia i have no idea, probably you have underhand deals and politics happening, but its a fairly lock down country, information-wise
Why have an exit condition at all? I'm not sure what's so inexcusable about what China is doing, by the looks of it, for their nationally important industries, they're doing pretty well.
> The first thing that jumps out is that it is impossible to avoid the absurd juxtaposition of a republican led major national corporate stake
The GOP overthrew its leadership in 2016 and a different faction took control of the party. The GOP started out as an economically interventionist party: https://www.journalofthecivilwarera.org/2017/04/gops-civil-w.... Then it went through a libertarian phase in the mid 20th century. Now its back to an economically interventionist party.
This is misunderstanding what really happened. The oroginal agreement with the CHIPS act is that if your company is profitable post expansion funding then you will profit share with the federal government. Trump changed that original agreement to one of stock ownership. Now the federal government can reneg the deal by selling back for their money any time. Arguably more dangerous than profit sharing.
It was never a nothing-in-return agreement, that is fiction.[0]
> if your company is profitable post expansion funding then you will profit share with the federal government.
Not to mention... taxes...
I mean I agree with you but even that article is talking about how it's not a free handout. It never could have been. A government could hand out money unconditionally and they'd still get a return as long as taxes exist. Intel's (or any company's) success results in them paying more taxes. Not just corporate taxes either.
The entire point of the funding is the strategic benefit that Intel's fabs in the US provide. That's the thing the US would get out of it.
Also consider: Who is the $10 billion coming from? Because it's not Intel. Intel just prints the shares out of thin air. This is Trump stealing $10 billion directly from Intel's shareholders, who get nothing in return because Trump is legally required to disburse the CHIPS Act money.
It's also just a complete misunderstanding in how a governments vehicle for investment works compared to a person's.
A person invests in a stock, hopes it goes up, and makes a profit (or loss) when they sell. That money isn't real until a sale occurs.
A government gives a grant and gets a return tomorrow and every single day of the company's existence as well as every single day each employee exists (even if the company doesn't). If a company exists, it pays corporate taxes. If that company has employees (as every company does), it pays payroll taxes. If that company has employees, they pay income taxes and various forms of consumption taxes.
IDK why we act like a grant is akin to lighting money on fire. Governments don't give out grants for nothing. They're still benefiting from it. Sure, the vehicles for return are different from a standard investment but also a government isn't a person. Well I should take that last part back. A government is a person in an autocracy (monarchy/dictatorship/theocracy/etc), but that shouldn't even be on the table.
It's also just crazy to see nationalization being packaged as capitalism. Those screaming for privatization while nationalizing. It's not even being done covertly either
TSMC was funded by government. The cost requirement for new fabs is beyond the funding private enterprises can muster. Perhaps through funding, years down the road, it may make sense. This isn't about Intel IP, it's about manufacturing high end chips on US soil.
So should the government give bailouts without getting any equity back? Only deal in loans?
Intel is strategically important. As nice as it is to pretend that the whole world plays by the same rules, that the free market exists everywhere and that we'll never to to war, there are bad actors and the US (rest of the collective West as well) need to ensure that we won't be completely crippled if China attacks a single island off their coast...
Better to be diluted than continue to invest in a company that goes to zero.
And it's the standard refrain: if this money helps Intel get back on its feet, the stock price will go up, presumably to the point dilution won't matter.
But who cares, really? If it's true that Intel is actually strategically important to the US, the shareholders are irrelevant if need be. It's not a great outcome, sure, but Intel has been mismanaged for a long time, and investors should have known the risks of investing in a company like that.
Maybe their shares get bought, in this case it looks like Intel might have simply issued the shares. In this case, shareholders have equity in a company that just had $10 billion added to the balance sheet and which the government signalled can't fail. INTC was up over 5% on Friday, obviously shareholders think the government investment is good for them.
Versus in most nationalisation events their shares simply get taken away or diluted to pennies.
> That and when most governments "nationalise" corporations they seize them and don't give the owners/shareholders anything.
First you get the money, then you get the power.
Money is fungible, but power isn't. Arguably, taking away my power is an affront to my human rights. Taking my money is an affront, but it never was my money to begin with, as I don't control the value or creation of it. My rights are inalienable.
It's not as easy as "nudging, cajoling and creating incentives for major customers to diversify their supply chains and use Intel capacity". Changing out process tech isn't like changing the tires on your car for another brand. It requires, in many cases, a substantial redesign....and directly working with Intel.
Why would a company support two different chip designs, for the luxury of deployment on an inferior technology platform, coupled to a troubled company that has a history of not being able to keep up or consistently deliver the latest process tech? It's a substantial, long-term investment that has wide reaching implications on the performance of your own products you are building. Who pays for that and sets up their company for failure like that?
If you build on Intel, you are making a decision that exempts you from competing in the top of market for your products. Your designs will run hotter, consume more energy, have less yield, and lower clock. The design will be more complex and costly and have very little shared between other vendors. You'll need to maintain and inventory two different BOMs for a critical component, and you'll likely have subtle hardware differences or completely missing features that will require further software customization, creating even more complexity and headache to delivering a modern tech product. Hardware designs are hard enough as it is and companies don't have infinite resources or capacity. And don't count on Intel taking the lead from one of the others, giving your product a boost -- anticipate them further falling behind, or lagging behind at best.
Like always, the government doesn't understand any of this and the outcome of this latest missive is going to be completely predictable.
> If you build on Intel, you are making a decision that exempts you from competing in the top of market for your products. Your designs will run hotter, consume more energy, have less yield, and lower clock.
Most of semiconductor production is not on the leading edge. Most big SoC production is not even on the leading edge. There's a lot of room for older fabs. And the customer can demand a lower price as a result of lower yield and performance.
> You'll need to maintain and inventory two different BOMs for a critical component
Most of this stuff that is not on the leading edge doesn't have a "leading edge variant".
Of course, I wouldn't build on Intel for other reasons: they've been terrible as a foundry and they have been changing directions seemingly weekly. That is the hurdle that you can't get over: you can't rely upon them as a partner.
It's capitalism when you're winning, and socialism if you're losing.
Or: "Privatised profits, socialised losses".
I understand why in this case, Intel is very much in bed with the US Government and likely makes a strong case for being a national security interest, but it feels icky.. especially as AMD is an American company too.
If the issue is the node fabrication then why wasn't their an investment in Fabs before now? Intel got its big start on government grants iirc.
So the logic here is that if I take a strawberry cake and sprinkle some chocolate on it then that's proof that a chocolate cake is better than a strawberry cake?
Not quite I think. The logic would be that everyone says strawberry cake is the best cake there is, yet every ten years we have to dump a ton of chocolate on it to make it edible so they're asking, was it really that good to begin with?
Why does everyone seem to use the word socialism incorrectly? When have the people ever controlled the means of production in the US (or anywhere, for that matter)? Social services and government support is not socialism by the literal definition of the word.
If Intel's stock goes up then the government can sell their shares to make money beyond what they'd get from taxes. Socialized losses would be like free money via grants while getting nothing in return, so this form of taking ownership of a company is strictly more capitalist, namely state capitalist like some countries around the world.
Let Intel fail. On a side note, though, the gov absolutely should take a stake in the entire market to and use it to both create sovereign wealth fund and a means for citizens to exercise their rights as stakeholders.
So maybe 50/50 that the top of the pyramid doesnt just take the free printed money and keep running the company into the ground.
If they pass that hurdle, its more like 70/30 Dump says put backdoors into all processors, and says it loud and proud. Assuming intel is smart enough to be able to fuse that functionality out entirely (not that anyone would believe they disabled the functionality)... That leaves somewhere about 15% chance that Intel survives 5 more years
I'm not against governments helping out companies per se in different forms but the question remains "Why are they there and what's the impact if they fall?"
It's been done many times in the past decades from financial institutions, manufacturing, others and in different ways.
Remember Harley-Davidson and tarifs on imported motorcycles?
I think the real question becomes how will get done and for how long.
Of course the WSJ is against anything even vaguely gesturing towards nationalization, how could this possibly be considered a reputable source for info on this topic?
Why wouldn't the Intel stock purchase just be effectively throwing away $9 billion? Do they think Intel is suddenly going to start running their business in a drastically different way?
That seems a rather aggressive response to someone suggesting you read the manual in order to enable a legitimate conversation about the topic. I explained why the shares aren’t given and why benefit still accrues to the public.
> That seems a rather aggressive response to someone suggesting you read the manual in order to enable a legitimate conversation about the topic. I explained why the shares aren’t given and why benefit still accrues to the public.
I disagree, but in the interest of not painting the mods into a corner with my reply, I won't pursue this thread further.
> Please don't comment on whether someone read an article. "Did you even read the article? It mentions that" can be shortened to "The article mentions that".
You didn't quite say that, but it rhymed. The sentence I quoted upthread added nothing to your comment, and that is that part I took issue with.
Maybe those are cost-plus contracts, so they would be able to claim hardship and incompatibility and send you a bill for even considering it, with an attached estimate for compliance at 10-1000x the last quote.
I wonder if the libertarians and the socialists are already clashing behind the scenes. Trump struck me as the latter and his vice president as the former.
> the US has no leverage to demand 10% of healthcare companies' stocks
The US government doesn't need leverage. It just needs an act of Congress. Corporations are convenient fictions that exist at the pleasure of our legal system, which can be changed.
I agree that this could be done as it has happened before, but I don’t think anyone would go quietly. It’s expropriation without pay or eminent domain if it’s with pay, but I would expect a Supreme Court challenge if Congress came anywhere near this, either way.
A nifty play would just be "the corporate veil is no longer free. Issue the state stock for a 49% stake, or your investors have unlimited liability." Then there's a theoretical "trade" but virtually nobody's going to say no.
That's the goal. Right now, public companies are far too governed by people who want the business to succeed at all costs.
The state could represent interests like "keeping high-paid jobs on-shore" or "avoid legal/labour/environmental standard arbitrage" that regular investors won't vote for.
the US has no leverage to demand 10% of healthcare companies' stocks.
US federal government is the biggest player in healthcare, by far. 32% of all healthcare spending is Federal government dollars. They have plenty of leverage. Bad if they use it, but they have it.
$900+ billion in Medicare yearly
$600+ billion in Medicaid yearly
Why would the government taking a stake of the insurance companies be a benefit from the point of view of the federal government or the insurance companies?
You said the government had no leverage, I am pointing out they have tremendous leverage. I said it would be bad to use the leverage, so I don't think there is a benefit.
> You said the government had no leverage, I am pointing out they have tremendous leverage.
That’s a fair point. I agree that my phrasing glosses over a bit of nuance. The political capital needed to reform the insurance companies would be hard to wrangle for anyone else but Trump, was my point. The government in many states regulates the insurance industry as far as rate increases and so on, so I’m sure they can apply pressure in many ways. I just don’t think that the government would do so, but they could in theory. I’m not sure they would in practice, but you were right to call me out.
That money almost seems like ill-gotten gains at this point. To a certain reading, it’s blood money.[0] If the insurance rates are too high, I don’t see how another cook in the kitchen is going to cook the books better, but I’m willing to believe that it could be a shakeup that might work. I just don’t have high hopes.
Most people in the US seem to not realize that a social healthcare system is better for all of them due to all of them sharing the bill.
Now only companies are left to pick up the bill, because a republican administration won't ever consider doing it.
I still wonder when CEOs will realize that lack of education and lack of healthcare will eventually land at their doorsteps because they won't have immigrant workforces anymore that can compensate for it.
> Most people in the US seem to not realize that a social healthcare system is better for all of them due to all of them sharing the bill.
As a high-income earner I used to be in favor of privatizing healthcare here in Italy/Europe.
I've always seen the public healthcare system wasteful and inefficient. Our healthcare system really is in a terrible spot.
Then few years ago, a very close friend of mine, had to give birth to her child. She had chosen one of the most expensive hospitals in the region, where there would be a huge staff all for her, not that crappy public service she would get.
Then tragedy struck: in all the luxury and care she was receiving, her newborn had huge problems staying alive, and died of respiratory issues few minutes after birth.
A very preventable death the autopsy stated moreover if she was in an appropriate public hospital.
Why? Because larger public hospitals have all a newborn reanimation unit with trained staff exactly for these kind of emergencies. Private ones? They are virtually non existent, doesn't matter the country or budget, no private hospital can afford such an expensive unit that requires extremely specific training and equipment but gets to act rarely if ever. So they don't exist in those contextes.
Since then I realized how naive I was: private healthcare just cannot justify investing in a huge amount of treatments that are a financial disaster for the private clinic/hospital. They just can't.
Thus, at the end of the day, you don't really want private healthcare that has to choose what to provide on a $ basis, you just don't. You want a as comprehensive and available public service that needs the right amount of money and incentives to work properly.
I don't know how can it be achieved, but you really don't want to be that father/mother, sister, friend or patient that cannot access an important procedure because it makes no financial sense to offer it.
Unless the workers own the means of production, it isn't socialism. The government is just another agent of capitalism here. Can we call this sparkling capitalism?
I think this war is lost. The word socialism means different things to different people. It all depends on where you stand and what you are looking at. If you are on the far right, most things the government does is socialism. If you are on the far left, everything the government does is to support capitalism. And in between the two everything goes.
I frequently say the same thing about the word Capitalism. (Communism too). They're second only to 'god' in terms of historical baggage.
If you say 'I like Capitalism', a significant minority will hear 'I love US imperialism and hate nature', despite that almost certainly not being what you meant. Similarly, if you say 'I like Communism', many hear 'I love dictators, gulags, 5 year plans and famine'.
A word of advice: if you actually want to have valuable political conversations with people, don't start by identifying yourself with ideology that's arguably responsible for various atrocities and millions of deaths.
> if you actually want to have valuable political conversations with people, don't start by identifying yourself with ideology that's arguably responsible for various atrocities and millions of deaths.
So neither capitalism nor communism? What's left, anarchism? I guess they haven't killed that many people.
The reason we use labels (bucket) is to make the conversation easier. Imagine that every time you use a word that you first have to define what it means. My point is that the word 'socialism' has now become meaningless.
Indeed, labels aren't useless. But when a label means one thing to one person and a totally different thing to another, it actually becomes an impediment to communication and is best avoided.
Communists are anti-reformist. They don't believe that anything short of a violent revolution will change anything.
Oh and if you like reforms, then you are anti-revolutionary, which means you are reactionary, which means you are a fascist. Yep, that's the standard communist logic.
The post from yesterday was news; this is commentary, as in, not a dupe.
To your point, it's arguably closer to state capitalism, which may be a distinction without a difference if you paint it with the same brush as socialism, but it's one worth mentioning.
The phrase "lemon socialism" used to be applied to the UK. The Government had managed to acquire the steel industry, the railroad industry, and the auto industry - all dying industries in the UK. They became British Steel, British Rail, and British Leyland.
The end result wasn't good. They turned into jobs programs.
Eventually those were privatized. Now, the railroads are being socialized again.
It's a pendulum effect, with nationalization on one end, and privatization on the other. If capitalism and money itself is the best organizing principle that works around the world, it does limit the opportunities for change and growth. Socialism doesn't have a counter to the market principle, so they can only incorporate it. The US has a branding problem; freedom ain't free, but nobody even votes, so we earned what we got.
China is trying to beat US at its own game. US (or at least its current political leader) is trying to beat Russia at its own game. Russia is trying to remain relevant. Russia is the muscle, China is the finance.
China needs Russia just like Google (Chrome) needs Firefox. Without Russia around, China would get all of the attention instead. Without Firefox existing, Google would have no counter to antitrust allegations in the web browser space.
Anything you can do, I can do better. I can do anything better than you.
No, not like that!
It's like that Spider-Man meme where everyone is Spider-Man pointing their fingers at each other. All the power structures are mirroring each other. It's all kayfabe, all the time. Everything is wrestling.
All those three, from what I can see, is a bit different though. Samsung is basically a part of the government, because of its history. TSMC is the market leader, so it’s in government’s best interest to protect its future.
Chinese large scale investments are a bit different. It’s not just SMIC who gets a lot of funding, but others as well, so they can still compete with each other, until the winner is chosen and the others fade away. Similar to what is happening in EV market in China.
Intel… there is a decent chance that company fails even after this investment. They basically need to force other companies to use Intel chips instead of competitors for them to be viable at some point.
Yes. So there are two considerations. One is competitive balance internationally. That is a consideration.
But you also have to consider whether the government has the legal authority to make the investment. For a country claiming a limited government and the rule of law, that is a serious consideration.
You seem to be focused on the first consideration, but do not overlook the second one.
It's more that one of the talking points of the political right in the us is that socialism is bad, while the state owning means of production is a key idea of socialism. So Trump making this happen is very ironic.
The US is trying CCP-style state-capitalism? Also, the glorious leader and great GOP chairman Trump gave his owners a great opportunity for insider trade. Last time be publicly bragged about it, too.
neonate's archive link doesn't include the actual article, just the lede. I don't know why I can't reply to them, but I suspect it's because their post is pinned by mods, but it doesn't work properly for that purpose, so this may help:
typical tech bro - they don't want any government regulation and want all the federal dollars they can get for nothing in return. we shouldn't be giving tax payer money to any private or public profit driven corporation ever. Mind you that's also a libertarian principle but tech libertarians always leave that part off.
The handwringing over Trump continues and is completely unwarranted. Obama bailed out the entire banking industry to horrifying moral hazard. The US is bailing out Intel for national security reasons and taking a 10% stake is a better deal for US taxpayers than how typical bailouts like GM played out. Sheesh! It's like you can't even read a news story these days without seeing the anti-Trump bias programmed into the article.
Obama had every opportunity to change the tune when he came into office but he doubled down on bailouts instead, so it's a kind of not that important who signed what.
Aside from the fact that Bush signed the banking bailout bill, not Obama, it is absolutely possible and reasonable to believe that -- on the differing merits of each case -- bailing out the banks was a good (even if fraught) idea, but that bailing out Intel is foolish.
I'm not in either camp at the moment, as I don't have a deep understanding of Intel or its finances, but I'm tired of people whining about how others could possibly have a different opinion about two similar but different events, separated by nearly two decades, as if this is some sort of "gotcha!" moment. It's not. Move on.
But even if -- let's just say if -- this Intel bailout were identical to the bank bailouts in every way... priors matter! Even someone who agreed with Bush back in 2008 that the bailouts were necessary, someone who was largely in agreement with much of what Bush did during his presidential terms... that person could very much disagree with what Trump has done in the past 7 months (as well as what he did 2017-2021), and that disagreement makes it entirely reasonable to question whether or not this particular move is a good decision. That's just... entirely normal.
So, the one bad thing that sticks out about what Trump is doing now, is that he's adding more conditions to the money that has already been legally disbursed by Congress. Under the CHIPS act, Intel is already eligible to receive the money; Trump is illegally adding more conditions for Intel to receive the money, after the fact. To do this legally, the act needs to be amended. As simple as that. Anything more than that is illegal.
Totally unwarranted--you allowed Biden to be US President and he was mentally impaired the ENTIRE TIME and you were just fine with that, probably. So get over it! I had to. The absurdity of modern life is unbelievable.
Governments owning stocks feels like double dipping with a touch of socialism.
I get why the idea seems sane, you want to get returns on investments, right? But with governments the vehicle for returns is taxes and investments are often called "grants" (but also loans, credits, etc). The tax system means you can make investments and always get some return. FFS you could invest in a company going nowhere and you still recoup through taxes. The only way you lose in this system is by tanking the entire economy. Idk why this is so hard to understand. Why people think things like research grants is akin to tossing money into a pit and burning it.
I know the current party is anti tax but aren't they also anti nationalization (Words, not actions)? Changing (or adding) your returns vehicle to be through stock only creates nationalization. It increases returns but also puts an additional thumb on the scale. It's very short sighted.
Who knew socialism would come to America wrapped in an A̶m̶e̶r̶i̶c̶a̶n̶ capitalism flag?
Well... usually that is done through a government. There isn't a single type of socialism just as there isn't a single type of capitalism. The government being a public entity, being a representative of the government, is in fact one way to handle said social ownership.
Given other examples worldwide, it's a minor form of state capitalism, not socialism because again there is nothing about workers (not just any taxpayers) controlling the means of production.
Forgive me, but I'm having a hard time reading this in any way that isn't equivalent to you declaring Scottland as fictional. It's not like there is exactly one form of socialism and anything that deviates from it in the slightest is capitalism.
Governments make regulations that command how companies operate and take taxes from companies. Governments already own significant stocks of companies in all but name.
If you make targeted grants, rebates, subsidies, etc, it even seems more fair to make taxing also targeted.
And is giving Intel subsidies and making Intel pay for it more socialist than giving Intel subsidies and making everyone pay for it?
Anyone here arguing that we should just let Intel fail in the market needs to understand that Intel is struggling right now partly because Asian nations like South Korea and Taiwan have for years subsidized their own chip making companies because they knew that in the long term, it was going to be an important strategic industry that would eventually be worth the effort and trouble. Now look where we are. Their long term strategy has paid off. Only TSMC is at the cutting edge, and Samsung is a fairly distant, but still reasonably close, secondary player.
Maybe there are better ways to prop up Intel besides the government taking a stake, but losing Intel would be a huge blow to American manufacturing interests. There's been a failure of strategic vision, both at Intel and in the American government. I think as a short term measure, taking a stake isn't the worst thing the government could do at this time.
Also to go off on a tangent a bit: this is one of the benefits of having a Trump-like character as President; he's clearly not beholden to any ideology and is extremely flexible when it comes to making policy decisions, even when a certain policy might be more at home with the opposing party or side of politics.
We have a $37 trillion dollar deficit. I think traditional government isn’t working and we need to find ways to raise revenue sooner rather than later before this spirals out of control.
Tariffs are taxes, they are not opposed to raising them, they just won't call them "taxes." It's honestly remarkable how effective they are in reaching their policy goals, because they understand their voter base extremely clearly. They know that their voters largely go off of key words, so by changing those words, one can make them support whatever policy one wants. It is amazing to witness, really.
https://www.wsj.com/opinion/uncle-sam-shouldnt-own-intel-sto...
Didn't we already cross this particular Rubicon during the auto bailout a decade ago?
Other examples:
> Since the 1950s, the federal government has stepped in as a backstop for railroads, farm credit, airlines (twice), automotive companies, savings and loan companies, banks, and farmers.
Every situation has its own idiosyncrasies, but in each, the federal government intervened to stabilize a critical industry, avoiding systemic collapse that surely would have left the average taxpayer much worse off. In some instances, the treasury guaranteed loans, meaning that creditors would not suffer if the relevant industry could not generate sufficient revenue to pay back the loans, leading to less onerous interest rates.
A second option was that the government would provide loans at relatively low interest rates to ensure that industries remained solvent.
In a third option, the United States Treasury would take an ownership stake in some of these companies in what amounts to an “at-the-market” offering, in which the companies involved issue more shares at their current market price to the government in exchange for cash to continue business operations.
https://chicagopolicyreview.org/2022/08/23/piece-of-the-acti...
First, what came out of these bailouts?
Each example industry continues to require some sort of government intervention to remain solvent at one point or the other. Auto/banks/saving and loans getting bailouts in 2008/2009. Airlines in 2020/2021 due to COVID etc. These industries employ a lot of people and now have become a political hot zone for voters so there is no way to remove these backstops now.
And whether these industries remain competitive globally is another question. Because it is always funny to hear countries accuse each other of propping up one industry or other through government intervention.
Second, these were industry wide bailouts. This action is not.
The genesis of CHIPS Act is a 2020 deal to onshore TSMC. The idea was to further persuade Samsung and Intel to produce chips in US through tax benefits, loan guarantees and grants. But now with US taking a stake in Intel, the strategy for onshoring TSMC and Samsung becomes unclear. Maybe the idea is to use tariffs to make TSMC and Samsung uncompetitive if they don't onshore but that is a bad idea. Because if Intel finds it easier to just coast on "national security" and continue producing last gen chips, they are going to do that and lower innovation even more. This is a win-win for Intel though.
Also, if you are TSMC and Samsung, why bother “on-shoring” to America and not just make Americans pay the tariffs since there are no alternatives and it is unlikely that America can really compete. They will also be fighting the current as BRICS/Asian momentum picks up right in their front yard.
I mean for TSMC, a fab in Arizona means they can manufacture chips for drones and planes and ships even if Taiwan is blockaded and under assault.
Given with how poorly Ukraine has been treated, why would Taiwan ever think they could easily get an emergency supply of chips for drones and planes exported from the US and past a Chinese blockade?
If Trump or someone similar is in the office I'd expect that there would be demands that the chips stay in the US to protect the country from Chinese aggression unless there is some kind of bribe.
Exactly, no one with a brain is falling for this twice. Taiwan is wise to acquire nukes. Which is sad.
Impossible. There is no way China will allow that- it would lead to a Cuba situation.
If it happened it would be sudden, like Japan or South Korea having built their own, sending some to their neighbor. It still seems unlikely to me, but it isn't impossible. If China found out before they were installed it would likely instigate conflict. If they did not, I have no idea what would happen. That is an unstoppable force meets immovable object sort of situation.
Let's be honest. No one would touch them, just like N Korea or Russia,once you got the bombs, you're good.
Impossible. There is no way China will allow that- it would lead to a Cuba situation.
I can't see how this wouldn't favor Taiwan? All the US republicans would start screaming about WW3 etc, it would put major pressure on China. I'd say it would be ideal for Taiwan.
The discussion now seems to be, "How do we get the chips out of Taiwan so we can let it fall to authoritarianism with the least political fall out possible".
Taiwan benefits from the US having access to some additional chip manufacturing to support a war effort and reduce the economic cost of intervening. At the end of the day, Taiwan can resist, slow down China, and make them pay an absurdly heavy price for trying to invade, but US participation is needed to break a blockade and end the conflict.
None of this was ever being done because there an expectation that chips were going to be exported to Taiwan in the middle of a conflict.
Yes, like every other security partner, Trump's immature and inconsistence isolationism makes things worse and unstable. But it was hardly the case that intervention would have be 100% assured under any other President, and it's not the case that that its at 0% under Trump. Improving the odds of intervention, slightly, regardless of who is in office, benefits Taiwan.
Moreover, Putin didn't attack US forces when he invaded Ukraine. There is a significant chance that the PRC would launch a Pearl Harbor style attack on the US and Japan at the outset of a campaign against Taiwan. That dramatically increases the odds of the US being involved in the conflict over the long term. Sure, it's also likely (probably more likely) that the PRC might try more limited form of coercion instead, but one ought to be prepare for the range of possible options.
It is worth observing that one of the major reasons why US conservative China hawks give for not wanting to support Ukraine is because it's not a vital US interest, and they want to focus on preparing for war with China and hopefully deterring it.
It is really unclear you should say why that the Ukraine is being treated "poorly", it is being treated how you'd expect an more isolationist administration who thinks it is a strategic distraction would treat it. The current US administration may well be wrong about this--there's definitely a case to be made that further increasing the cost to Putin for aggression increases deterrence in Asia. But the current administration was very clear in the election about how they felt about Ukraine, and they won.
The argument that unless Trump treats Ukraine "not poorly" no one, anywhere, ever, ought to anything to bend the curve to increase the odds the the US intervening on their behalf seems rather sentimental and unpragmatic.
It seems likely that Taiwan leaders have a better grasp than you do of the strategic choices they are making, and that random feelings about how "poorly Ukraine has been treated" don't enter into it.
If you just hate Trump, it would be easier and more direct to say that, rather than seeming to claim that other people in the world are acting irrationally.
Breaking Russia would mean less money and resources for China and more time for NATO, the thing conservatives seem to think is stupid / unimportant to prepare. It’s probably too late now but the opportunity was there in January.
It's not like they have a great hand to play, especially if China is going in 2027 the way people think.
If there weren’t other players in the game that might be true. As it is, though, the EU is rapidly rearming, and has proven itself to be far more principled and stable in the Ukraine conflict.
I wouldn’t trust a deal done with the USA to be worth anything right now. I would trust a deal done with Europe, Korea or Japan. All of whom would love to have TSMC build a fab in their respective territories.
The EU may be rapidly rearming, but there is no way it will be in a position to help fight off a Chinese invasion of Taiwan in 2027. They won't have the navy. They won't have the force projection capabilities. They won't have the ability to get past China to get assets to Taiwan.
I’m talking about a deal with TSMC to safeguard their production.
Although, between the EU, Japan and Korea there might be enough of an incentive for China to think twice even without the US involved.
There are two countries in the EU that operate nuclear submarines and aircraft carriers. More with conventional subs. Shutting down the sea lanes in that area would be relatively easy for any number of European countries.
One thing that Ukraine (if Iraq and Afghanistan didn’t already) has proven is that it is much harder to win a war for a major power than the posturing would have you believe.
The realistic scenario is that the Taiwanese elite does a deal with the CCP.
America is nobody's friend, at the end of the day China are still Chinese. Americans are xenophobic and racist. Increasingly anti free trade and isolationist.
Also I am incredibly sceptical that the US wants to go to all out war with China over Taiwan. A war they aren't even sure they can win and that REGARDLESS OF OUTCOME will leave Taiwan in ruins.
If the US is poised for full on dictatorship, it makes sense to go in early.
If there will be a change in leadership, it makes sense to wait until the US has weakened every alliance as much as possible under Trump and then invade quickly like what Russia did.
Xi has demanded that China be "ready" in 2027. So he seems to think that China will not be militarily capable of doing so before then. (Or at least he seems to be saying that. It could be a misdirection.)
> Chinese blockade
I laughed a bit.
How long would it be until their entire fleet is sunk? 2 days? A week?
How long after that should the Three Gorges Dam be allowed to exist?
> How long would it be until their entire fleet is sunk? 2 days? A week?
That's not something you or anyone else could predict.
> How long after that should the Three Gorges Dam be allowed to exist?
This would immediately cause a death toll in the millions and a nuclear response would follow.
> That's not something you or anyone else could predict.
You're right: nobody can possibly predict how a nation with no blue water navy, and zero relevant (naval or otherwise) combat experience (ever) might fare against the most expensive, trained, veteran naval combat force in the world - backed by the world's two largest and most expensive, trained, veteran air forces (USAF, USN).
> This would immediately cause a death toll in the millions and a nuclear response would follow.
This presumes that the United States would ever allow a blockade to happen to begin with. The US Navy goes where it wants.
> Second, these were industry wide bailouts.
As I recall Ford did not take a bailout in 2009.
> the federal government intervened to stabilize a critical industry
They intervened to maintain the status quo. Industries are neither stable or unstable for a long period of time without external influences forcing that outcome. Short term turbulence is to be expected and is beneficial for the market as a whole.
They destroy markets and then lie to your face about it.
> industries remained solvent.
How does an _industry_ become insolvent? Only when it's nearly fully monopolized and when there is no difference between an industry and a single entity. This is where we are currently.
> more shares at their current market price to the government in exchange for cash to continue business operations.
Couldn't they just offer those shares to _any investor at all_? Why is the government special here?
> https://chicagopolicyreview.org/2022/08/23/piece-of-the-acti...
Of course. Chicago school thinking. It's infected our country for decades now. Certainly not to the benefit of it's citizens.
CPU manufacturing without any intervention is likely leading towards a monopoly. Every latest generation fabrication facility costs much more than the previous one. Eventually we’ve reached the point where only three companies (Intel, TSMC, Samsung) are interested in making such a large investment.
Could it be that Chicago school thinking has worked but greed & profiteering elsewhere have stolen benefits from the citizens?
> Is there some society you know that doesn’t run on greed? … What is greed? Of course none of us are greedy. It’s only the other fellow who’s greedy. The world runs on individuals pursuing their separate interests.
Milton Friedman when asked about combating greed.
Yes, and altruism doesn't exist, everyone is political, and a whole slew of other nonsense banalizations that pretend that distinctions cannot be made.
> Greed: a selfish and excessive desire for more of something (such as money) than is needed
This definition is quite easy to distinguish ordinary desire from greed. Otherwise you need to render selfish and excessive banal and meaningless as well.
How is "needed" determined? 3 of my 4 grandparents made it around 100 years old with way, way less than what I "need" for my kids.
They did not need doctors, daycare, helmets, cars (they sat 5+ to a motorcycle), air conditioning, avocados, bedrooms, computers, etc.
Getting more than needed does not imply that something is needed at all. You can live your whole life without needing to eat a Lychee, but if you eat 1000 of those that is clearly more than needed. A person who never ate a lychee maybe cannot put it into perspective and might suggest that wanting a single lychee is greed, but most people wouldn't find it difficult to see that perspective as extreme. Change lychee for cocaine and you suddenly start getting a different balance.
Context and our norms is what determines it.
I know. Per your definition, anyone who desires a vacation to a tropical island is greedy. Or eating at restaurants. Playing video games, renting a movie, eating dessert, etc. How about living on the California coast? People who want to earn more so they can move there are greedy? Or do they simply desire it?
One of my cousins' parents immigrated to the Bay Area, but mine went to the midwest. Am I greedy for desiring to earn income more than a couple standard deviations above the mean so that I could buy land in the Bay Area? Is my cousin not greedy because they were born there?
>Context and our norms is what determines it.
Exactly, which is the problem with trying to distinguish "desire" and "greed". "We" don't have norms. I was lambasted growing up by my grandparents for wanting things that any 1990s kid had in the US, but they didn't have in their poorer country from 1920 to 1940.
> Per your definition, anyone who desires a vacation to a tropical island is greedy. Or eating at restaurants.
It isn't my definition, it's Merriam-Webster dictionary, and I suggest reading the definition more carefully, it really isn't that hard to understand. That is how the word is used.
All of your examples are not selfish or excessive. So not greedy. That it isn't a clear bright line isn't a problem, most judgements in life are not clear cut.
Milton Friedman is wrong.
The human emotion that drives free market capitalism optimally isn't greed, it's competition.
People compete to produce better goods at a lower price to win acclaim and profit.
Greedy people mess that all up by amassing wealth and then using that wealth to change the rules of the game so that they can amass more wealth.
"Winning profit" is greed. That's how you amass wealth.
It's like you're arguing that overeating isn't how you gain weight, it's just having an unbalanced caloric ratio.
Profit seeking through competition isn’t the same as greed. Greed is the impulse to rig the game once you’ve won a little, so you can keep extracting more without competing. And that tendency from some kinds of people corrodes free market capitalism and its ability to drive innovation and reduce prices. Competition only works if players play by the rules.
And your food analogy works against you. If we extend your analogy, profit is like eating, greed is like overeating. Saying profit = greed is like saying every person who eats three meals a day is a glutton. Competition rewards healthy eating -- efficiency, balance, discipline. Greed is scarfing down the pantry and locking the fridge so nobody else can eat.
> Greed is the impulse to rig the game once you’ve won a little, so you can keep extracting more without competing.
You're making up your own novel definition of greed there, which is certainly cheating when you're saying Milton Friedman is wrong. He was using greed in a more generally accepted sense, ie, a desire for more than one has right now.
There are a lot of greedy people out there who are scrupulously honest. As far as I can tell, the average greedy person should be modelling scrupulous honesty, advocating fair systems and enforcing rule-following behaviours - that is creating the best environment for acquiring capital and maintaining property rights. Greedy people who white-ant the systems sustaining their capital are generally more stupid than greedy.
Economists really should read more Adam Smith: for every word he wrote on free markets, he wrote five more on ethics and morality.
Newton wrote more about alchemy and theology than he did on physics too. There's a reason why Newton and Smith are primarily remembered in a subset of the fields they worked in.
And, boy, has he got opinions on landlords!
Give me your definition of greed.
I did. "a desire for more than one has right now"
If you want a dictionary definition, search suggests "An excessive desire to acquire or possess more than what one needs or deserves, especially with respect to material wealth".
On their own neither of those implies any desire to rig games or to avoid competition. Some greedy people do that, but since pretty much everyone is greedy to some extent you find greedy people with every combination of human characteristics.
It's hilarious to watch people try to pretend that "crony capitalism" and "capitalism" are different things, as if the greed to rig the system once you've won is fundamentally different from the greed that pushes you to compete in an un-rigged system.
No, sorry, it's not only the same emotion, it's the same system and the same rules: if greed is good, why shouldn't one seek network effects, platform effects, last-mile dynamics, vertical and horizontal integration that block competition, engage in FUD and dumping and regulatory capture and so on and so on? The answer that the entire business community and an increasing fraction of the general population seems to agree to is that one should, and this has prevented the sort of gardening that can keep the system actually competitive and working for the people, rather than working for the people on top, which is what it overwhelmingly wants to do when left to its own devices.
A typical example here might be something like chess. The primary reason people play it is competition and enjoyment of the game. But there are some who a distorted mentality and simply want to win, even if they're not the one's doing anything, and so you get things like people using computers to cheat. And online chess sites (and increasingly even major over the board events) only work so well by making sure that these sort of people are completely removed from the game.
The desire to compete is somehow not really the same as the desire to win. This is overtly apparent in things like body building. 99.9% of body builders will never compete in a body building show, let alone win, but enjoy the journey that's mostly full of years of self inflicted pain, occasional injury, and endless dedication - largely for the sake of competition and of course what it does to your body. And that latter part isn't really about showing off or sex or whatever, but simply about pride in what you've accomplished - much in the same way one might take pride in their ability to play chess well, or manage a healthy business.
You're splitting stupid hairs here over the exact implication of words in a setting where they don't exactly matter. Whether you call it greed, self interest, a desire to amass wealth, etc, doesn't really matter because for the fat part of the bell curve it's all the same.
No.
Greed and competitiveness are two different motivators, and free market capitalism is driven by competition and not greed.
People compete for many reasons and the collection of material wealth is only one of them.
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since some of the criticisms of Chicago style thinking include blindness to greed and profiteering, or actively promoting them, it would seem more reasonable to argue the criticisms of Chicago school thinking were correct, that Chicago school thinking worked as planned, and this is what we got out of it.
Were those vulnerabilities particularly obscure or might they have been obvious from the outset?
“The purpose of a system is what it does.”
If it just weren’t for that darn greed and profiteering that the Chicago school endorses.
Sounds a bit like all those no true Scotsman defenses of communism
- Communism is awesome!
- What about countries X, Y, and Z?
- Oh, that wasn't "real" communism!
Given that communism is a sci-fi imagining of what the world will look like in the age of post-scarcity, the last point is unquestionably true. We have never achieved post-scarcity. It remains science fiction.
Most imagine post-scarcity will be awesome. While one can never know for sure, for all intents and purposes, the first point is also true. To the best of our knowledge, achieving post-scarcity will be awesome. It is why everyone, even (and in particular!) the USA, is striving to get there someday.
Communism imagines that statehood will come to end, so "countries", in the context of communism, doesn't make sense. It is likely confusing "communism" with "Communist Party".
I mean it really wasn't. Every time a country has tried communism it's fallen straight down the despotism rabbit hole or had the government taken over by officials who wanted a much bigger piece of the pie at the cost of the constituents if you catch my drift.
> Every time a country has tried communism
At what point do you decide that's an inevitable outcome, rather than an unfortunate unexpected outcome that happens every single time?
Once a country that isn’t already prone to dictatorships has tried it.
I'm not sure there's very many of those.
Communism gives politicians 100% control over the country instead of roughly half like they have in capitalist democracies, So people wont vote for communism because its autocratic.
You never want all power to be in the hands of a single group of people, capitalist democracies separates private from public, so politicians regulating companies are not the same people who are owning those companies. Communism can never work since its an autocratic system with a single player, you need multiple actors.
And yes, in some capitalist democracies company leaders are close bedfellows with politicians, we call that corruption, it isn't like that in all countries.
> Communism gives politicians 100% control over the country
Impossible. Communism has no concept of state (nor money, nor class). That's, like, its defining feature.
Of course, you can't just wish for class, state, and money to go away. They are necessary features of our current world. Communism is the imagined outcome of what happens after we achieve post-scarcity. It is a work of science fiction. Star Trek is a more modern adaptation on the same idea.
> Communism can never work since its an autocratic system
If it were more than science fiction, it is literally the opposite, but, again, depends on post-scarcity. You are likely confusing communism with the Communist Party, who believe in an autocratic system being necessary to pave the way to achieving post-scarcity, with, on paper, a desire to get there.
Maybe a little pedantic. Socialism then, or any existing embodiment of the first stages of Communism. Imposed by force on a population accustomed to another way. Usually accompanied by state confiscation of large businesses, the accompanied corruption, waste and ultimate food riots that often occur. Then a military takeover that's decried as crushing the utopian communist ideal! But actually, just getting everybody fed again.
> Socialism then
While the Communist Party does believe in socialism, that does not sum it up either. That would be like trying to tie the Republican Party up in a capitalism bow. They do believe in capitalism, but so does the Democratic Party. Yet they are clearly different parties with some very different ideas.
> or any existing embodiment of the first stages of Communism.
The USA is the country most in the first stages of communism. Its technical innovation has nearly pushed food into post-scarcity territory (some argue it is already there), and it is working hard, harder than any other country, to do the same in other areas of production.
While some of your points resonate with what Trump is doing, for the most part he is an aberration and there isn't yet much indication that he — or anyone in the future — will get away with it.
Can you list any such countries where a communist state would not result in oppression and dictatorship?
Norway or Sweden, maybe?
Chile once democratically elected a marxist to lead the country, and while not technically a member of the Communist Party himself, the Communist Party was part of his coalition. For all intents and purposes, I expect this meets what the previous commenter was talking about. It did not become a dictatorship during that time.
Ironically, it did become a dictatorship after the USA staged a military coup and overthrew said government, but anyway...
And Chile was a communistic paradise and everyone had everything communism promises?
You seem mighty confused. Communism is impossible without achieving post-scarcity, and you know full well we haven't achieved that yet.
Communism doesn't exactly promise anything. It is a sci-fi imagining of what the world will look like in a post-scarcity world. Star Trek is a more modern adaptation on the same idea. Would you say Star Trek promises us something? Notably what communism does imagine, though, is that there is no state.
If you read back in the comments, you'll see we're not talking talking about communism at all, rather "communist state". As before, communism rejects the concept of having a state, so you know we cannot possibly be talking about communism. Instead, "communist state" usually refers to a country under rule by the Communist Party. As Chile was ruled by a Marxist inside a Communist Party coalition we said that was likely close enough for what the earlier commenter was trying to convey.
Chile was a technocratic democracy then. Is that paradise? That is in the eye of the beholder, I suppose, but it must have been pretty good else why would the USA have wanted it to dismantle it so badly, undoing what was, at the time, one of the most stable democracies around?
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> Didn't we already cross this particular Rubicon during the auto bailout a decade ago?
This Darth Vader style "I am altering the deal, pray I do not alter it any further" gambit is new to the best of my knowledge. If the CHIPS Act had been structured so that it was equity purchases that would be one thing.
The other day I went down a rabbit hole reading about the history of insulin, and learned about the Canada Development Corporation:
>The Canada Development Corporation was a Canadian corporation, based in Toronto, created and partly owned by the federal government and charged with developing and maintaining Canadian-controlled companies in the private sector through a mixture of public and private investment. It was technically not a crown corporation as it was intended to generate a profit and was created with the intention that, eventually, the government would own no more than 10% of its holdings; it did not require approvals of the Governor-in-Council for its activities and did not report to parliament. Its objectives and capitalization, however, were set out by parliament and any changes to its objects decided upon by the Board of Directors had to be approved by parliament.
The CDC was created as a result of Walter Gordon's Royal Commission on Canada's Economic Prospects, and the 1968 Watkins Report commissioned by Gordon, in an attempt to redress the problem of foreign ownership in the Canadian economy by stimulating the development of Canadian owned corporations, particularly in the field of natural resources and industry
About 31,000 private shareholders invested in the corporation. An early purchase of the corporation was Connaught Laboratories, the original manufacturer of insulin.
Major investments owned by the CDC included holdings in petroleum, mines and petrochemicals including Polymer Corporation, an asset transferred to it by the Canadian government. By 1982 the Canadian government had a 58% stake in the Savin Corporation.
In 1986 the Corporation was dismantled as part of the Mulroney government's program of privatization.
https://en.wikipedia.org/wiki/Canada_Development_Corporation
Polymer Corp itself is a fascinating origination. Created in ww2 to create synthetic rubber - which the Germans had all of the ip of - it was a wildly successful research to commercialization entity. It was so successful after the war it was considered too important to privatize and it stayed as a crown corp for decades.
I believe they even did a run of $10 celebrating it.
I remember reading about something similar in the USA, where the federal government encouraged the creation of very large presses.
https://en.wikipedia.org/wiki/Heavy_Press_Program
A lot of USA investment in industry falls under defense spending. Canada doesn't spend nearly as much on defense, so has to be creative on how to cultivate domestic industry.
Yes and the scale was far larger, over $80 billion given to GM and Chrysler. GM was majority owned by the US government for a number of years after that too.
Sure, it's been done before, but looking at the end result though, I'm not sure if that's a strong argument for whether it should be done again.
Look at the end state of the US auto industry. It's uncompetitive in basically every part of the world and thus basically irrelevant, except in the US. Unless somehow something different is going to happen here, this could end up with Intel continuing to perform poorly, negating the point of keeping it alive to begin with.
> Didn't we already cross this particular Rubicon during the auto bailout a decade ago?
We nationalised passenger rail in the 60s.
Governments aren't people. If I gift you money, that money doesn't come back to me. But if a government gifts someone money, it makes its way back. As long as that money gets spent, there's returns. Even if you die, and even if you don't have that $14m for the death tax, that money still pays dividends back.
The only way it doesn't is if the economy crumbles or that money is taken out of the entire economy (which is much harder to do considering the dollar being the current global currency). So basically you need to light it on fire.
You can do things to slow that flow but it does come back. A low interest loan is just increasing that flow and this is why a negative interest rate can still generate a return. A company can fail and there'd still be returns through taxes in the mean time. The money doesn't just evaporate.
I think a lot conversations about money get weird because we over generalize what money means, applying money's context for an average person more broadly. But money has a very different context when you're talking about governments, corporations, or even billionaires (due to the shear amount). Nor are those examples the same either.
In this case I think it matters. The government already has a stake in Intel, and in all companies. Shares only decrease the pie available to the public while increases the ability for government official to do insider trading and increases nationalization.
While your arguments are correct, I don't think they are relevant.
Like, for example, the government could give me a few billion bucks and everything you said would still be correct. I would also spend it, etc. etc.
You as a company? Sure, you can spend a few billion.
What does this have to do with the comment I responded to? Who knows[0]
[0] https://www.youtube.com/watch?v=BknZGQoCFt4
Yes, but no. The bailout was companies that were headed for bankruptcy. Is Intel? My impression is that they're a lot further from it than GM and Chrysler were.
Intel had been trading below its cumulative physical assets for a pretty long time.
This means the market believes they have a path to bankruptcy. Since markets are forward looking, how close it is to bankruptcy does not matter too much. In this case they needed money and the government provided a relatively low amount for a pretty significant stake in the company.
Well said and on point.
Intel, the CPU (and GPU) designer is doing fine.
Intel the advanced IC manufacturer is worth effectively nothing right now.
If they can prove a successful advanced manufacturing process and start making chips on it that will likely reverse fairly quickly, but it's been a decade since they held fab leadership.
Perhaps the government should have required Intel be split into a fab business and a chip design business (as Intel has planned to do itself but hasn't been able to, for reasons). The chip design part can survive on its own without subsidies. Then the government can pump money into the fab business for national security reasons without affecting the chip design market too much.
The problem with Intel splitting is precisely that the fab is worth nothing.
No one will give Intel real money for the advanced fabs, as they are worthless right now. I suspect that's probably the main thing holding Intel back from doing that - they can't get a decent price on the fabs, and just spinning them out directly would probably lead to a fairly immediate failure without Intel's CPU design division funding development without immediate expectation of returns.
If one was a gambling man (with a good helping of pride), you keep the fabs with Intel (where the CPU design division is printing money) and subsidise the fabs and hope they finally stick the landing and start making half-decent chips again.
Intel should have split 15 years ago, ideally, but I'm not sure that splitting now isn't better than not doing it. If they fail to catch up to TSMC, it's possible that the manufacturing branch will drag the design branch down with it.
If they split, it's likely the fab side of the business will need a large infusion of cash in order to catch up (be it in the form of a government bailout or something else), or then they have to accept becoming a second-rate player. For which there is still a large market, so they might actually do decent-ish there. But that pretty much leaves TSMC in a monopoly position.
And, so? Government back then wanted something, government right now wants something (slightly?) different?
The reality is any government (USG included) getting 10% share ownership in a company is ... barely news. The more interesting news (or speculation) is whether this is a smart move or not.
I dunno if you lived through 2008, but the government actions at the time were pretty big news.
When United States is becoming Venezuela like nationalizing shit it is major news :)
Not nationalizing as in confiscating, but bailing out, like it's 2008. A 10% stake is not even that big.
Major news nevertheless.
This isn't a bailout, though. It's strong-arming.
I think that is OP's point though, that when we open the door to things that are different not in kind, but only in degree, then we are likely to always expect the degree to increase
Yes I know that this is the slippery slope but it also accurately describes the trajectory of politics in America at basically every step
Did you look at this headline?
“The Chips Act wasn’t about raising revenue, and an equity share wouldn’t enhance national security.”
Every generation of fab is increasingly expensive. TSMC has over 500 customers, including Intel. Intel basically only has Intel to pay for those $20 billion fabs.
What happened to Intel? Did they need a bailout?
My intel powered workstations from 2008 have chips that are more than decent enough for modern computing.
But in reality, they gave up on R&D, Missed Apple mobile chips and then put a lot of MBAs in top leadership positions to make their financial schemes work. Those schemes did not work and they were left without technical leadership. When they got the tech leadership, the board just gave up and fired him and brought in a chop shop CEO to part intel out.
For some reason, the US admin thinks this is a good buy. You probably would too, if you bankrupted multiple casinos.
Intel is going the way of SunBeam, Sears and Toys r Us. The board failed to stop that. And failure attracts more failure.
I have a Core 2 Quad machine around from 2008 for nostalgia reasons and retro computing, and even with a modern lightweight Linux on it, it's definitely not enough for modern computing unless what you consider modern computing is writing text documents and viewing websites ... slowly, and for that it's extremely wasteful since it has a 95W TDP while a 2W modern smartphone/tablet can do that even faster and more efficient, plus it's also portable.
Having to do any kind of 2025 type of work on it would be testing my patience to the extremes because all SW and media has grown in size and/or complexity(AV1 encoding, etc) requiring faster CPU, GPU, storage and RAM for the optimum experience. The only things that run fast on it are period accurate Linux 2.6 and Windows XP with websites form 2008, but I wouldn't call that modern computing.
Computers have gotten night and day faster and especially more efficient since 2008, pretending otherwise would be in bad faith.
Depends what you consider "modern computing"; I wouldn't like to try Rust development on a 2008 machine, let alone things like path tracing.
Watch this video:
https://www.youtube.com/watch?v=m7PVZixO35c
New computers aren't as much faster as benchmarks would lead you to believe. If your code relies on unpredictable branches, dependept memory accesses in a tight loop, or very tight feedback loops inside computations, new CPUs won't have that much of an edge.
I'm writing rendering engines, so quite up to speed on how fast CPUs and GPUs are, where the bottlenecks are etc :) In fact I worked on the latest Cinebench as part of Redshift dev.
Ah sorry, didn't mean to sound so haughty, I really just quickly type these comments off before I start my workday, really should give more thought to sounding a bit more tactful.
It's really cool they you get to meet people like you here in the comments :)
However I think the video raises an interesting point - I imagine you're an expert on modern CPU optimization, and spend quite a bit of time thinking about cache access patterns, exposing instruction-level parallelism to the CPU and other such gory bits without which your code wouldn't be running as fast on modern CPUs.
Most of us regular folks however don't really write code like that, and I think for that sort of code, I don't think modern CPUs run as much faster than an ancient Core 2 Duo, as benchmarks would suggest, but we can expect results somewhat more like in the video I linked.
Congrats on your work getting used in Cinebench, but I can't help but ask you - what's your thoughts on your work getting used to basically benchmark every CPU under the sun by tech reviewers, who then make recommendations on whether to buy that CPU or another one. Looping back to the previous point, I think your code has quite likely very different performance characteristics than the sort of generic stuff most people end up running, and this sort of benchmarking creates an incentive for manufacturers to crank out CPUs that are good at running hyper-optimized path tracing code, while ignoring real-world performance. What are your thoughts on that?
as a counterpoint, I did all of my rust contributions including creating rustdoc on a $300 walmart laptop w/2GB RAM my parents got me in december 2007. you just work differently when that’s your tool :)
> put a lot of MBAs in top leadership positions to make their financial schemes work.
Has it ever worked?
It usually does until it doesn’t, then stops working really fast. GE and Boeing are recent examples.
So it never actually works, the momentum from before just hides the fact and makes it seem that it works until it doesn’t.
It works splendidly for all those MBA's with golden parachutes.
It seems we need a system where these failures are visible earlier. If you consider the current economy a strategy game, our game dynamics incentivise bad short-term optimisation.
We can blame the MBAs, but we really should see how we can propose a better system. And then convince people of that.
Okay okay, I give up already.
It works for long enough to ride on the rise of the stock, and cash out.
Ofcourse Intel was printing money for a while.
Long term? No. But what Westerner cares about long term?
Intel never in any way gave up on r&d, their main problem was failing to get their new tech working, and a couple of had bets.
The random acquisitions and board leadership didn't help intel but r&d had plenty of money poured in
We often fail to realize how cutthroat the chip business is and how many bad decisions away from oblivion all players are. It’s just that Intel is more exposed to those risks because it’s both design and foundry making risky bets.
OTOH, if TSMC makes a couple bad bets in a row, all their 500 clients will be in deep trouble.
I’m not sure if that’s true.
The current lowest speced Mac can absolutely dominate my previous 2012 2x20c ivy bridge era Xeon tower. And on top of that, the power and heat are drastically less with the new machine.
The only reason a system of this era even kept up is the years Intel just didn’t do anything that was that much better and because of ram and pci express expansion which allowed for upgraded faster storage and faster gpus.
These days I can get better performance in a system that I can hold in my palm (Apple m4, amd ryzen ai 9) that doesn’t produce enough heat to keep my entire room toasty in the winter.
>But in reality, they gave up on R&D, Missed Apple mobile chips and then put a lot of MBAs in top leadership positions to make their financial schemes work.
How do you know it?
They got incredibly lucky with IBM choosing the 386 for the PC platform and have been riding that wave ever since.
Itanium was a flop from bad business decisions IIRC. Note too that x86-64 was developed by AMD, and Intel licensed it from them.
> They got incredibly lucky with IBM choosing the 386 for the PC platform...
1. IBM picked the 8088 for the PC platform. This was part luck, part Motorola being too slow to market with the 68k.
2. The first PC with an 80386 was made by Compaq, not IBM.
3. A big part of what held OS/2 1.x back was IBM insisting on it working with the 80286, which made properly supporting DOS programs challenging. OS/2 2.0 came out 6 years after the first 386 based machine from Compaq.
> Motorola being too slow to market with the 68k.
Also Texas didn’t have a second source for the TMS9900.
We definitely live in the worst possible timeline.
Thank you for the clarification!
> Itanium was a flop from bad business decisions IIRC.
Itanium was a flop from a technical standpoint but not from a business one. Intel spent roughly a gigabuck and effectively scared every competitor out the pool except for IBM and AMD.
Intel is suffering because their old fab folks all retired, and no young, smart engineer over the last 20 years wanted to work for any semiconductor company let alone Intel.
> Itanium was a flop from a technical standpoint but not from a business one. Intel spent roughly a gigabuck and effectively scared every competitor out the pool except for IBM and AMD.
Even without the Itanium, the economies of scale in the x86(-64) world would have driven the RISC vendors out of the game.
True, but who knows how much later that would have happened, and how the market would have looked by then.
The false information about the future of Itanium scared almost all of them to surrender, about in the same way as the fictional Strategic Defense Initiative had scared the Russians.
Sure, the details would certainly have been different, but my argument is that the end result would not have been that different from what we saw playing out.
My quick 5 cents for what might have happened in the interim:
- Without a separate high-end offering in the form of the Itanium, Intel is quicker to adopt x86-64, and produce high-end server chips with extra RAS etc. features.
- POWER and SPARC, being the last holdouts in the RISC market in our actual timeline and outliving Itanium, would likely not have been affected much wrt. Itanium existing or not.
- SGI with MIPS would likely have been the first one to fold. Would SGI have pivoted to x86-64 & Linux sooner than they historically did, or would the company have gone bankrupt first?
- HP/Compaq with PA-RISC and Alpha is perhaps the most interesting question. HP did a lot of early VLIW/EPIC research with an eye towards developing a successor to PA-RISC. Would they have thrown that R&D away and selected to focus on either PA-RISC or Alpha after failing to secure Intel as a partner in the Itanium? Or would they have tried to develop something Itanium-like without Intel?
Another interesting what-if, if Itanium didn't exist, would instead 3rd-party manufacturing of high end chips (similar to TSMC today) have been developed sooner than historical? Keeping in mind that a large reason for the Itanium was accessing the semi process R&D and chip manufacturing prowess of Intel, as the thinking at the time was that tight (vertical!) integration of the chip design and manufacturing was a requirement for the highest end CPU's. And it was the spiraling costs and volume required of chip manufacturing that was the boat anchor around the necks of the RISC vendors moreso than the chip design itself.
SDI was real and led to the missile defense systems that the US has fielded today.
Their old fabs folks were let go in prior layoffs and the quality of people pursing degrees in semiconductors has been dropping over time
Intel fell behind TSMC around ten years ago and the resulting malaise—still not fixed—almost put them out of business. So yes, they needed a bailout and got one.
TSMC is now a monopoly with over 500 customers. It’s more than a money problem
Intel really never had big external customers and the ones that tried also failed, like LG.
Yes, but without external customers to pay for the newer advanced fabs, Intel can no longer afford to invest in fabs.
Agreed. Their problem is both, struggles with new EUV fab and don't have the org capable of working with customers.
Not an American monopoly though.
ASML is also a monopoly that’s not American.
You must be missing something.
Typical story of the one of many products of globalism where the standard traditional definition of monopoly has been nullified by it's massive supply chain spanning countries.
That's where the comparison with the auto bailout in the wake of the financial crash falls apart.
Intel got no bailout. The government demanded 10% of the company for financial grants that Intel already received, largely under the Biden administration, under vehicles like the CHIPS act (you know -- the massively successful policy that is the actual reason that a bunch of latest tech chip plants are being built in the US). It's an absolutely bizarre situation, and the only reason Intel would even go along with it is that this administration operates like an extortion racket and would somehow cripple the company otherwise.
Hope Intel doesn't really need the 20%+ of profits that come from China, because the Intel/China/USA relationship just got really weird.
Is this even legal? As far as I can tell, there's no provision in the CHIPS Act allowing grant funds to be used to buy equity.
Very little this admin does is legal. You need the justice system to actually work for that to matter though.
So in effect, unless the next administration runs on punishing these abuses and actually follows through, may as well be legal.
Dumpster fires can’t burn forever!
Indeed, the US has a long and storied history of privatizing riches and socializing losses.
I think the government bailout saved tesla a few years ago.
(Now they can meet their end by footshoots like removing the turn signal and drive select stalks)
> government intervened to stabilize a critical industry, avoiding systemic collapse that surely would have ...
I guess we'll never know what would have, no matter how sure you seem to be.
I, for one, am still a little bitter about what could have been if not for a couple of those bailouts.
Did you also oppose the government stepping in when Silicon Valley Bank collapsed? The FDIC had a clear upper limits. It shouldn't have paid depositors more than that.
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Communism with extra steps
More like a different form of what is called communism in one of its forms
The problem here isn't that the government gets involved in businesses. That has always been something they do.
The problem is that these days they do it capriciously, without any sort of plan or intention.
The government played a foundational role in supporting the early stage research that enabled companies like Intel to emerge. Underwriting that sort of long-term investment that wouldn't easily attract commercial capital is a great place for them to be.
Meanwhile, is it even the case that the American chip industry is declining? Apple, Nvidia, and Google all have significant chip manufacturing operations. And this isn't an industry I even follow particularly closesly.
> Apple, Nvidia, and Google all have significant chip manufacturing operations
No, they all (as well as AMD) all have significant chip designing operations. Not one of them can actually fabricate their own chips. Every single one of them must speak to TSMC or Samsung if they want to take their designs from the whiteboard to the physical world.
Thanks for clarifying! I misspoke there, but from my standpoint (portfolio manager/equities investor) that's better.
Wafer fabs are capital intensive, complex, and need constant retooling. The bulk of the commercial value lives in the stuff you do on your whiteboard.
From a geopolitical standpoint, I'll concede there's value in having the ability to actually make the stuff without acceding to the duopoly. But I'd still rather see the capital invested in basic research which might change the capital dynamics of the industry in the intermediate to long term.
> Thanks for clarifying! I misspoke there, but from my standpoint (portfolio manager/equities investor) that's better.
From a national security point it really, really isn't. Like, I'm not a fan of the Trump administration, but having basically all chip manufacturing in Asia is not a good idea if you think there'll be a war with China in the next few decades.
Another commenter already noted the CHIPS[1] act, which was a deliberate act to try and specifically bring fundamental high value chip manufacturing and science to the United States.
It is extremely relevant to this conversation. Regardless of whether you think China engages in a war with Taiwan, it is a crucial resource the US will want developed locally (similar to any critical resource like farming, steel, or rare earth metals).
CHIPs seemed more well thought out than simply taking control of 10% of Intel.
[1] - https://en.wikipedia.org/wiki/CHIPS_and_Science_Act
>but having basically all chip manufacturing in Asia is not a good idea if you think there'll be a war with China in the next few decades.
I see this a lot, but I’m not smart enough to understand it.
The US still has immense military power. Is the suggestion China/Asian is going to make the US so desperate for lack of chips that they use this power? Whether the manufacturing plants exist in Texas or Taiwan, the US military basically ensures they exist. And if that supply is cut off and that is forecasted to be the turning point of a war, then with a figurative push of a button, the US military makes sure that other countries also don’t have chip manufacturers (i.e. blows them up). Similarly, other countries can target plants on US soil if war breaks out anyways. I don’t see a war coming to that point or to the US losing access to chip manufacturing because of one. What don’t I understand from this angle?
That said, I do think it’s important for the US to have their own chip manufacturing on shore. Not as some protective measure over some combat war, but (1) to ensure less possible influence from foreign governments and decrease likelihood of possible backdoors or intentional sabotage and (2) to protect against other factors from shutting down the facilities, like natural disasters.
What happens if the PRC annexes Taiwan without bloodshed?
The options available to the US are: attack the PRC to blow up the chip manufacturers and probably start WW3, or frantically try to replicate the capabilities of the Taiwanese fabs before the PRC decides to cut the US off.
In the meantime, the PRC will have immense leverage over the rest of the world, and there is no scenario where they don't extract as much as they can from that advantage.
I’d rather prepare for life with China in total control of Taiwan than try and defend Taiwan from China. I believe they will take Taiwan without bloodshed, anyway. Which is why it is critical to build up the US advanced manufacturing base. It will take a long time and cost a lot of money.
I believe the US government agrees with you, which is why they are investing in domestic alternatives to TSMC (including encouraging TSMC to build a plant in the US).
>What happens if the PRC annexes Taiwan without bloodshed?
Do you realistically see that happening? Why would the US allow that to happen when they are so reliant on it not?
https://en.m.wikipedia.org/wiki/Taiwan%E2%80%93United_States...
I don't think it's likely to happen, but it's certainly an option I would prepare for if I were the US government.
As to why the US would allow it to happen, the PRC could take steps that would make the defense of Taiwan politically undesirable to the US (threatening biological warfare is one example that comes to mind).
I am not sure what you are trying to say? That the US can simply press a button and end a conflict with China? China has been posturing forever on Taiwan being a part of China. They love to show of bridges and boats that would be able to facilitate a land invasion. We have already seen how quick China integrated HK. It is not a nonzero chance that China makes a move on the US. If that happens, where are the chips coming from. It’s smart to want to increase geographical diversification for something that is used in almost all tech products.
>China has been posturing forever on Taiwan being a part of China.
And yet they continue to just posture instead of doing it.
The US does maintain a small military presence in Taiwan already. Answer me this: if the US is so heavily dependent on Taiwan _not_ being part of China, then why would they let them take it?
US bringing chip manufacturing in country weakens Taiwan’s position and only then will China take it, when it feels safe from retaliation from the US.
Again I am not exactly sure of your position.
They maintain a small military presence? Not really, there are no bases and last report in March was 500 US military trainers. I would not really classify that as a military presence.
If China wanted to take Taiwan today? Honestly not sure what would happen. Maybe the US intervenes, maybe not. I am not even sure how I feel about either side. What I do feel strongly about is that it’s best both for the world and the US to reduce chip concentration from Taiwan. I believe in comparative advantage but also believe sometimes it’s useful to guide the invisible hand when there are crucial industries. I don’t even know how I feel about China. They have done amazing things in lifting their country, especially when compared to close neighbors like India but also I never can get a good feeling for their intentions as they play a much longer game than most of the West.
War with an actor like China would not be pretty. Their country has seen no real conflict so there is question about battle readiness but missles and drones don’t need much training and I personally don’t want to test it. So while yes I don’t think China is making a move today, I also believe it’s a highly complicated problem for its concentration risk, maybe they make a move tomorrow and the world is reliant on China for chip manufacturing.
>Maybe the US intervenes, maybe not.
There is a 0.00% chance that the US does not intervene. That’s why we have a small presence there and a large presence in Japan. And that’s why China has not yet taken Taiwan.
I think this is where youre missing it > The US still has immense military power. Because this isnt true anymore and its been proven over and over in the past few years. As industrial power goes so does military and the US military is showing huge cracks while facing 3 massive wars in the pacific, ukraine, and middle east. Its already admitted it cant protect all 3.
The chinese just this week shut down the entire US auto industry because of rare earth if they blockade taiwan how long until they win that.
>Because this isnt true anymore and its been proven over and over in the past few years.
This is just incorrect. It has not “been proven over and over in the past few years”.
This is quite a naive take, sorry to say. It is absolutely true that a war is brewing in East Asia, part of the explicit intent being to control other countries' chip usage. This is the same sort of argument that was used during World War I when the major powers said there'd never be a war on the continent because every country was interconnected in commerce and culture, and well, it turns out that reasons for war aren't always rational.
The CHIPs act passed Congress during the Biden administration. The only thing Trump added was this weird non-elected post hoc equity grab.
You explained the issue perfectly we are moving past a age and time where we care what portfolio mangers/equity investors want. The point is to do things those investors hate but benefits the US government which you explained they wont do without force.
If you can't manufacture your chips while your only geopolitical rival is pumping infinite money to homegrow their own fab business, it probably should cause some concern.
If the only source of high quantity and high quality chips is located in your competitor's backyard, and they spent several decades repeating how it's their wayward province that they fully intend to reclaim one way or another, it's pure stupidity to sit around and do nothing.
Let's not pretend that the money would be spent on basic research instead, by the way. US pumping some money into chip production is a rare spark of intelligence amidst an avalanche of stupidity and grift.
Amazes me how many self-proclaimed "techies" don't know this simple fact.
You would be amazed how many seemingly basic things about this world and IT you don't know... a bit of humility goes much longer way than this.
If I don't know something, I don't make statements such as "Apple, Nvidia, and Google all have significant chip manufacturing operations..." a bit of humility goes much longer way than this.
I don't think you understood my post
Nor did you understand mine.
Which American companies manufacture chips on the latest node? Certainly not Texas Instruments, Global Foundries and one might even argue Intel, compared to Samsung and TSMC. It is a matter of national security that Intel not fail.
What government or military things use anywhere near the latest node chips though? I thought all that stuff usually uses really old chips, because that stuff only changes like once every couple decades.
The government wants to build AI data centers and I'd assume they're not using decades old nodes to do so. There is always a use case and therefore national security interest for the latest nodes.
It is a matter of national security that state-of-the-art fabs exist within the nation and that the expertise to operate them also exists within the nation.
As you point out, it is questionable whether Intel has either of these.
It might be argued that it is critical to national security that Intel be replaced by HP. Or Nvidia. Or Sun, or Motorola, or Micron, or TI, or...
What's that you say? Most of those companies had their chance and failed? None of those companies are really in the game?
Why among all the list of failed or current fab owners is it so important that Intel be declared sacred?
Why not recognize that Intel is getting its clock cleaned by a company that doesn't design chips? Why not look outside of the chip design industry to save the chip fab industry?
The bet seems obvious - Intel has been failing for a while, but they're still much better positioned to produce what the US government wants than some random companies like HP or TI. Their fabs aren't quite on the bleeding edge and the yields aren't quite what they'd like to have but it's still much more advanced than TI's 45-250nm fabs.
If HP, or Nvidia, or Sun, or Motorola wanted the bag maybe they should've tried building their own modern fabs.
Because Intel is the only player left. What do you mean look outside the chip design industry to save the chip fab industry? It takes a very long time and lots of money to spin up a new state of the art fab, while Intel already has it mostly set up.
> Why among all the list of failed or current fab owners is it so important that Intel be declared sacred?
Has TI ever made anything nearly as complex as CPUs? Has NVIDIA? (Hint: the answer is "no"). Intel is pretty much the only option, though ChatGPT suggests GlobalFoundries as a potential other option (spun out of AMD).
Intel is definitely special in that it's the only truly American fab.
I don't have a problem with a US government owning a stake in Intel given its massive strategic importance, but I have a problem with this government owning a stake in Intel given its brazen corruption.
Exactly, and indirectly supported all business, with roads, the police, schools...
Government should own a stake in every business, and citizens should then get shares in that government fund.
I think that stake is called taxes. As for the shares, they're supposed to come in the form of government services.
In theory, but there's a bit of a chasm of trust between the two.
> Unlike grants, equity comes at a steep cost to Intel. Transferring grants into equity therefore risks putting Intel at a cost disadvantage relative to other chip makers
A lot of this article seems to rely on this point but the possible cost isn't clarified. I can understand equity arrangements affecting shareholders but how would it reduce the product's competitiveness, notably the unit cost which seems to be the point regards to other chipmakers. If it's about stock price going down, employee comp going down and product effects from that, it seems too speculative?
On the flip side, it sounds like instead of cash over time it becomes a lump cash infusion, which seems like it could result in benefits of its own such as bringing forward timelines.
<< how would it reduce the product's competitiveness
It wouldn't. It is an opinion piece. On that basis alone, knowing what we know about media landscape, it exists as a means of forming opinion and allowable argumentation for the issue at hand.
If that premise is accepted then the piece is there to protect the poor shareholders, who until now were thinking Intel will be getting 'free' government money, but suddenly found the cost of government involvement may be higher. Suddenly, that is a bridge too far. You can grant them money, but, good heavens, think of what you will do if you demand that we give you equity of said money..
I mean.. sure WSJ intended audience, who is bound to nod on 'productivity' line of argumentation, but people with a sense of Intel history ( or most US industries that offshored and now talk reshoring for that matter ) might chuckle at the hutzpah.
this is the logical conclusion of outsourcing: we kept giving away the low end electronics and now we can't compete on the high end w/o government subsidy
the supply chain moved to asia and the just so stories about ricardian free trade + an inflated stock market made everyone believe, while the ultra-rich got ultra-ultra-rich
and now we sit down to our banquet of consequences
From my pov, it looks more like intel shit the bed repeatedly.
Missed on: mobile, custom chips in the data center, graphics cards, ai, and building out fab services they can sell.
Meanwhile, they took at least 5 years off of making their chips faster, and we're treated to the absurdity that the m-series chips are as performant in single core as anything Intel can build on a power budget 1/10th of Intel's.
I'm not sure what that has to do with outsourcing? It looks more like a comprehensive lack of execution.
Intel should have spun out their fab in 2009-2010 when the signs were clear: Mobile was taking off, AMD spun out their fab, Intel had missed the boat on mobile CPUs, and Apple had acquired PA Semi and was investing heavily in custom silicon.
High-end fab is a volume game and that was the time frame when Intel was still process competitive and could have competed for Apple's business (and Nvidia's, ...). But that would never happen as a division of Intel, nobody wants to send their designs to a competitor.
Thats such a rear view mirror take. I am not in this industry but it was obvious Intel had a manufacturing advantage back then and this let them be the dominant player in this space for decades. High margins and they were the only game in town for the x86 in most key markets (AMD was just a cover for antitrust cases).
Even 10 years ago Intel was a blue chip stock, saying they should have cannibalized their lead to go into a lower margin market for volume would have gotten you kicked off any executive role.
Imagine being in a boardroom in 2010:
And someone proposes: "Let's split the company, cut our margins for a bet against our design team in mobile volume, and start manufacturing chips for companies that might become our competitors."You're probably right; either that or beat Qualcomm/Samsung at providing the non-Apple chips. As rafaelmn points out, 2010 may be premature, but by 2015, they should have understood.
How they fiddled and watched Apple take the phones that make a profit; Samsung/Qualcomm provide chips to the rest; and all the hyperscalers make their own arm chips in the data center while doing nothing. Absolutely nothing. Is beyond comprehension.
Meanwhile, (I think Asianometry?) pointed out that Intel's headcount was recently as large as AMD, nVidia, and TSMC combined.
Intel was (is?) the largest sponsor of EE H-1Bs. Most such people coming from two countries where it's practically impossible to win the green card lottery. The upshot of that is a massive brain drain when these people have to leave.
Yeah if you are only gonna look at one tree it's gonna look like it's a bad tree.
Now do H1Bs and offshoring.
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Your comment actually is racist though.
You have no idea if those Indians are here on a visa, greencard, or have American citizenship.
You just see brown people, some of whom may or may not have accents, and are angry they’re making “six figure salaries” while people you define as Americans (I wonder how your Americans look like) are “struggling to put food on the table.”
I am not one of these people who spend their lives on Twitter or Bluesky or whatever calling everything under the sun racist. But your comment here is actual racism.
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IMHO Let Intel fail. Their fabs can be bought in bankruptcy by other chip companies that may be better run. Granted, a lot of those companies are currently fabless, but how many would change that with equipment bought at a fraction of the cost? TI, Micron, GF all have fabs. Qualcomm strikes me as a fabless that might give it a shot. I'm assuming the people and know-how would come with the fabs of course.
There are a lot of times where I'd say a business should be allowed to fail - but this is a poor choice to do so.
* You can't just spin up leading edge semiconductor manufacturing on a dime. It takes decades and hundreds of billions to reach where companies like Intel and TSMC are now. It's so hard that it's essentially impossible for new entrants to catch up.
* The US has a strong interest in having local manufacturing, that no other power could take away in a time where it's needed.
>a lot of those companies are currently fabless, but how many would change that with equipment bought at a fraction of the cost?
Zero. Dumping the fabs on them would not help them. They're expensive and complicated to run. They don't have the knowledge to run the fab side of design (it's a joint effort on both sides to design a chip), nor the money or knowledge to improve those fabs and keep them up with the leading edge.
> You can't just spin up leading edge semiconductor manufacturing on a dime. It takes decades and hundreds of billions to reach where companies like Intel and TSMC are now. It's so hard that it's essentially impossible for new entrants to catch up.
You can if intel goes bankrupt. Why do people act like a bankruptcy consists of taking all the employees out back and putting them down then setting all the buildings on fire.
It's hard to retain knowledge and processes in a bankruptcy. Even if you manage to get ALL the equipment and the people back (far, far from guaranteed) sometimes you've broken the systems that let it work in the first place.
(Not that Intel's has been working particularly well, as of late)
I would agree with your approach if we were simply discussing whether the government should fund intel, but we’ve already committed to funding intel via the government. Pulling back would hurt intel and our interests. Now that intel has become reliant on our promised funding, it makes sense to attach conditions to the funding we need to do instead of just handing it out while getting nothing in return.
The first thing that jumps out is that it is impossible to avoid the absurd juxtaposition of a republican led major national corporate stake, after a decade of the auto bailouts being used as a poster child of policy that the current party in charge doesn't agree with.
Moving on from that, you make a good point that it may be the best compromise if the original deal is off the table. That said, in my eyes the implementation could be better. On both a practical and ideological level, I think it would behoove the dealmakers to lay out clear exit conditions. That could look something like anything from signing a covenant with Intel to freeze dividends and corporate buybacks and pay down debt (which is dangerously high for them currently), and then once the corporate balance sheet gets to a safer level, the US gov could run a public auction for the equity once that strike level is hit. I'm sure they could come up with something palatable. What's unexcusable is to apparently enter into a seemingly permanent zone of CCP-style state corporate capitalism without clearly laying out what that means for America going forwards. As an average citizen, I certainly have questions about the precedents being set, and to me it just looks haphazard and off-the-cuff.
> The first thing that jumps out is that it is impossible to avoid the absurd juxtaposition of a republican led major national corporate stake, after a decade of the auto bailouts being used as a poster child of policy that the current party in charge doesn't agree with.
The only absurd here is to think republicans care about anything other than power . Doesn't matter what they did or said yesterday, what matters is what can they say and do today to remain in power and enable their deep pocketed donors to make more money and gain more power.
People really have to stop thinking there's anything there, there's nothing, its all about acquiring and using power. Trying to come up with ideological reasons as to why they do this or that is useless.
>The only absurd here is to think republicans care about anything other than power . Doesn't matter what they did or said yesterday
Right, but it's an absurd juxtaposition when taken at face value none the less. I agree with what you said, but my point was more about other possible structures for the deal rather than political conclusions. I was attempting to brush aside the political considerations and take a somewhat tabula rasa approach, not spur a partisan political conversation, which clearly I failed at by mentioning the absurdity in messaging.
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Pray that before 2026, you won't have had any DOJ approved FBI raids to Trump political enemies.
How I guess it will happen: first target 'close ennemies': same party, small public recognition, but opposite views on specific policies you want to denounce. No charge filed, just good old intimidation: raid the home, take the files an computer, then say "sorry we didn't find anything" after a few months.
My mother hosted political refugees from Russia and Kazakhstan, I've heard a lot of story, and that shit seems to always starts the same way.
You're a couple days late, it already happened: https://nypost.com/2025/08/22/us-news/patels-fbi-raids-john-...
But you're spot on -- John Bolton is a long-time Republican war hawk, small name recognition, differing views on many specific policies (came out against Trump during his first impeachment), home raided by FBI under vague implications, boxes taken, computers taken.
What happens next, according to the refugees?
In Kazakhstan, it was a power play to designate a new common enemy (in the case i know, Orthodox christians). The man was close to the president but fell in disgrace. It was used to quell the protests (i was an adult when this happened, so probably after 2009, i'll have to look), and the group that supported him, the Orthodox church, fell with him as public ennemies (it was also racism/ethnicism because most of the orthodox were ukrainians/Cossacks displaced under Staline during the famine, and looked quite different than ethnic Kazakhs). Basically fascistic behavior.
The refugees i've met were all part of the church, so the purge hit a lot of people. Not sure if it worked, after all, i think they changed president recently, but i'm definitely not an expert on the area.
In Russia i have no idea, probably you have underhand deals and politics happening, but its a fairly lock down country, information-wise
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The auto bailouts were started by Bush
https://www.nytimes.com/2008/12/20/business/20auto.html
Absurd all the way down.
Perhaps I should have nixed the political aside at the top. Wasn't my intent to bring that to HN.
Why have an exit condition at all? I'm not sure what's so inexcusable about what China is doing, by the looks of it, for their nationally important industries, they're doing pretty well.
> The first thing that jumps out is that it is impossible to avoid the absurd juxtaposition of a republican led major national corporate stake
The GOP overthrew its leadership in 2016 and a different faction took control of the party. The GOP started out as an economically interventionist party: https://www.journalofthecivilwarera.org/2017/04/gops-civil-w.... Then it went through a libertarian phase in the mid 20th century. Now its back to an economically interventionist party.
This is misunderstanding what really happened. The oroginal agreement with the CHIPS act is that if your company is profitable post expansion funding then you will profit share with the federal government. Trump changed that original agreement to one of stock ownership. Now the federal government can reneg the deal by selling back for their money any time. Arguably more dangerous than profit sharing.
It was never a nothing-in-return agreement, that is fiction.[0]
[0] “Biden to require chips companies winning subsidies to share excess profits” >> https://www.reuters.com/technology/us-require-companies-winn...
I mean I agree with you but even that article is talking about how it's not a free handout. It never could have been. A government could hand out money unconditionally and they'd still get a return as long as taxes exist. Intel's (or any company's) success results in them paying more taxes. Not just corporate taxes either.
The entire point of the funding is the strategic benefit that Intel's fabs in the US provide. That's the thing the US would get out of it.
Also consider: Who is the $10 billion coming from? Because it's not Intel. Intel just prints the shares out of thin air. This is Trump stealing $10 billion directly from Intel's shareholders, who get nothing in return because Trump is legally required to disburse the CHIPS Act money.
It's also just a complete misunderstanding in how a governments vehicle for investment works compared to a person's.
A person invests in a stock, hopes it goes up, and makes a profit (or loss) when they sell. That money isn't real until a sale occurs.
A government gives a grant and gets a return tomorrow and every single day of the company's existence as well as every single day each employee exists (even if the company doesn't). If a company exists, it pays corporate taxes. If that company has employees (as every company does), it pays payroll taxes. If that company has employees, they pay income taxes and various forms of consumption taxes.
IDK why we act like a grant is akin to lighting money on fire. Governments don't give out grants for nothing. They're still benefiting from it. Sure, the vehicles for return are different from a standard investment but also a government isn't a person. Well I should take that last part back. A government is a person in an autocracy (monarchy/dictatorship/theocracy/etc), but that shouldn't even be on the table.
> that shouldn't even be on the table
I wish that were so.
Ditto.
It's also just crazy to see nationalization being packaged as capitalism. Those screaming for privatization while nationalizing. It's not even being done covertly either
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TSMC was funded by government. The cost requirement for new fabs is beyond the funding private enterprises can muster. Perhaps through funding, years down the road, it may make sense. This isn't about Intel IP, it's about manufacturing high end chips on US soil.
it's less than ideal to have the sole company capable of making the best chips 81 miles off the coast of China.
Yes, this is also about the non-existing level playing field. How can US win if countries like China don't play by the same rules?
Tariffs
what rules lol?
So should the government give bailouts without getting any equity back? Only deal in loans?
Intel is strategically important. As nice as it is to pretend that the whole world plays by the same rules, that the free market exists everywhere and that we'll never to to war, there are bad actors and the US (rest of the collective West as well) need to ensure that we won't be completely crippled if China attacks a single island off their coast...
Is there a difference between this and nationalization? Just a matter of degree?
> Just a matter of degree?
That and when most governments "nationalise" corporations they seize them and don't give the owners/shareholders anything.
What are the shareholders getting out of this?
Better to be diluted than continue to invest in a company that goes to zero.
And it's the standard refrain: if this money helps Intel get back on its feet, the stock price will go up, presumably to the point dilution won't matter.
But who cares, really? If it's true that Intel is actually strategically important to the US, the shareholders are irrelevant if need be. It's not a great outcome, sure, but Intel has been mismanaged for a long time, and investors should have known the risks of investing in a company like that.
Maybe their shares get bought, in this case it looks like Intel might have simply issued the shares. In this case, shareholders have equity in a company that just had $10 billion added to the balance sheet and which the government signalled can't fail. INTC was up over 5% on Friday, obviously shareholders think the government investment is good for them.
Versus in most nationalisation events their shares simply get taken away or diluted to pennies.
They get $11.1 billion dollars invested into Intel.
https://www.intc.com/news-events/press-releases/detail/1748/...
The money was already granted without being tied to 10% equity. This looks like the government retroactively changing the deal.
> That and when most governments "nationalise" corporations they seize them and don't give the owners/shareholders anything.
First you get the money, then you get the power.
Money is fungible, but power isn't. Arguably, taking away my power is an affront to my human rights. Taking my money is an affront, but it never was my money to begin with, as I don't control the value or creation of it. My rights are inalienable.
> Intel is strategically important.
Fab capability on US soil is strategically important. Intel is one of many possible routes to that.
What are other routes? Just curious
No other fab comes close to current gen
It's not as easy as "nudging, cajoling and creating incentives for major customers to diversify their supply chains and use Intel capacity". Changing out process tech isn't like changing the tires on your car for another brand. It requires, in many cases, a substantial redesign....and directly working with Intel.
Why would a company support two different chip designs, for the luxury of deployment on an inferior technology platform, coupled to a troubled company that has a history of not being able to keep up or consistently deliver the latest process tech? It's a substantial, long-term investment that has wide reaching implications on the performance of your own products you are building. Who pays for that and sets up their company for failure like that?
If you build on Intel, you are making a decision that exempts you from competing in the top of market for your products. Your designs will run hotter, consume more energy, have less yield, and lower clock. The design will be more complex and costly and have very little shared between other vendors. You'll need to maintain and inventory two different BOMs for a critical component, and you'll likely have subtle hardware differences or completely missing features that will require further software customization, creating even more complexity and headache to delivering a modern tech product. Hardware designs are hard enough as it is and companies don't have infinite resources or capacity. And don't count on Intel taking the lead from one of the others, giving your product a boost -- anticipate them further falling behind, or lagging behind at best.
Like always, the government doesn't understand any of this and the outcome of this latest missive is going to be completely predictable.
> If you build on Intel, you are making a decision that exempts you from competing in the top of market for your products. Your designs will run hotter, consume more energy, have less yield, and lower clock.
Most of semiconductor production is not on the leading edge. Most big SoC production is not even on the leading edge. There's a lot of room for older fabs. And the customer can demand a lower price as a result of lower yield and performance.
> You'll need to maintain and inventory two different BOMs for a critical component
Most of this stuff that is not on the leading edge doesn't have a "leading edge variant".
Of course, I wouldn't build on Intel for other reasons: they've been terrible as a foundry and they have been changing directions seemingly weekly. That is the hurdle that you can't get over: you can't rely upon them as a partner.
I think this is one of the smaller problems the US might have right now.
What's the old saying?
It's capitalism when you're winning, and socialism if you're losing.
Or: "Privatised profits, socialised losses".
I understand why in this case, Intel is very much in bed with the US Government and likely makes a strong case for being a national security interest, but it feels icky.. especially as AMD is an American company too.
If the issue is the node fabrication then why wasn't their an investment in Fabs before now? Intel got its big start on government grants iirc.
> If capitalism is so great, then why does it need to be rescued by socialism every ten years?
Not sure where I read that (I think it was some dude's Tweet), but it seems relevant here.
So the logic here is that if I take a strawberry cake and sprinkle some chocolate on it then that's proof that a chocolate cake is better than a strawberry cake?
Not quite I think. The logic would be that everyone says strawberry cake is the best cake there is, yet every ten years we have to dump a ton of chocolate on it to make it edible so they're asking, was it really that good to begin with?
No, it's proof that chocolate can be a tasty addition.
Left: Capitalism isn't always perfect, sometimes social policies make a better society.
Right: Capitalism is always perfect, socialism is evil even in the smallest amounts.
Why does everyone seem to use the word socialism incorrectly? When have the people ever controlled the means of production in the US (or anywhere, for that matter)? Social services and government support is not socialism by the literal definition of the word.
Capitalism is socialism...
for some of the big giant corporations.
I mean, they are critical to the functioning of society after all, right?
The free market is dead in many industries.
Long live capitalism.
> Then why does it need to be rescued by socialism every ten years?
Please think of the poor, poor shareholders.
If Intel's stock goes up then the government can sell their shares to make money beyond what they'd get from taxes. Socialized losses would be like free money via grants while getting nothing in return, so this form of taking ownership of a company is strictly more capitalist, namely state capitalist like some countries around the world.
Let Intel fail. On a side note, though, the gov absolutely should take a stake in the entire market to and use it to both create sovereign wealth fund and a means for citizens to exercise their rights as stakeholders.
So maybe 50/50 that the top of the pyramid doesnt just take the free printed money and keep running the company into the ground.
If they pass that hurdle, its more like 70/30 Dump says put backdoors into all processors, and says it loud and proud. Assuming intel is smart enough to be able to fuse that functionality out entirely (not that anyone would believe they disabled the functionality)... That leaves somewhere about 15% chance that Intel survives 5 more years
I'm not against governments helping out companies per se in different forms but the question remains "Why are they there and what's the impact if they fall?"
It's been done many times in the past decades from financial institutions, manufacturing, others and in different ways.
Remember Harley-Davidson and tarifs on imported motorcycles?
I think the real question becomes how will get done and for how long.
Of course the WSJ is against anything even vaguely gesturing towards nationalization, how could this possibly be considered a reputable source for info on this topic?
The authors are Biden appointees who ran CHIPS Office. They are reputable sources on CHIPS policy.
One day, HN will understand the difference between an opinion piece and a news article. One day.
Why wouldn't the Intel stock purchase just be effectively throwing away $9 billion? Do they think Intel is suddenly going to start running their business in a drastically different way?
Are ARPA H, SBIR, NIH grants, etc. going to start taking equity stakes as well?
Why are we socializing risk and privatizing profit?
Seems like a bad combination to me, a net positive tax payer.
I think you should research the programs a bit to understand why they have been setup this way.
Everyone benefits from more medicine, weapons, food, etc.
So why aren't the shares being given to the public?
Nobody gets shares in the first place as they are non dilutive grants.
From what I understood new shares were being created. What happens to them? Where do they go? Who has custody of them?
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> If you’re gonna argue about this at least learn about the programs first.
Dude, this attitude is against guidelines. I'm OP: I posted this post. I'm asking in good faith. I'm forwarding this to mods.
That seems a rather aggressive response to someone suggesting you read the manual in order to enable a legitimate conversation about the topic. I explained why the shares aren’t given and why benefit still accrues to the public.
> That seems a rather aggressive response to someone suggesting you read the manual in order to enable a legitimate conversation about the topic. I explained why the shares aren’t given and why benefit still accrues to the public.
I disagree, but in the interest of not painting the mods into a corner with my reply, I won't pursue this thread further.
https://news.ycombinator.com/newsguidelines.html
> Please don't comment on whether someone read an article. "Did you even read the article? It mentions that" can be shortened to "The article mentions that".
You didn't quite say that, but it rhymed. The sentence I quoted upthread added nothing to your comment, and that is that part I took issue with.
I think you should write a meaningful reply instead of being a snark, oh learned one.
> Why are we socializing risk and privatizing profit?
>> Everyone benefits from more medicine, weapons, food, etc.
Everyone benefits from more weapons?
if money can be funneled to DJT - yea. otherwise, nah
New NSF crypto grants incoming :p
Why didnt the USGov/US military force their suppliers (Boeing, Lockheed, etc.) to buy from Intel? That would create some demand for 18A or 14A.
Maybe those are cost-plus contracts, so they would be able to claim hardship and incompatibility and send you a bill for even considering it, with an attached estimate for compliance at 10-1000x the last quote.
I don't think Intel makes anything suitable for their products...
Intel has FPGA, which is used a lot in their products
They are sort of doing this under the Secure Enclave program. "National security" chips will be fabbed by Intel.
https://archive.is/hTITI
What if we went the other direction and nationalized 100% of Intel? What would happen?
I always that the GOP was against public ownership of the Means of production?
Seems awfully… communist?
Jared Bernstein takes:
https://econjared.substack.com/p/us-capitalism-with-chinese-...
https://econjared.substack.com/p/the-usgs-intel-stakes-part-...
whoops! we accidentally democratic socialismed
Apple offers gold
Nvidia/AMD offer 15% profits
Intel offers 10% share
I think, as a TV star, Trump enjoys all the circus. And everyone else is playing along so it's fun.
I wonder if the libertarians and the socialists are already clashing behind the scenes. Trump struck me as the latter and his vice president as the former.
Vance has shown nothing other than authoritarian tendencies
It's socialism, after all, for the Government to own an interest in a company.
Covered yesterday on YC.[1]
[1] https://news.ycombinator.com/item?id=44989773
We can finally get that universal healthcare then
The healthcare industry doesn't need a bailout, though, so the US has no leverage to demand 10% of healthcare companies' stocks.
The healthcare industry is receiving perpetual bailouts through drug import restrictions, tax deductions, subsidies and favorable legislation.
> The healthcare industry is receiving perpetual bailouts through drug import restrictions, tax deductions, subsidies and favorable legislation.
The chip fab industry builds billion dollar bespoke superfund sites, and they're paid for the privilege.
https://www.jstor.org/stable/j.ctv65swcp.5 | https://doi.org/10.2307/j.ctv65swcp.5
https://en.wikipedia.org/wiki/Superfund
The healthcare industry as it is is dominated by parasitic middlemen sucking the money from both patient and provider.
> the US has no leverage to demand 10% of healthcare companies' stocks
The US government doesn't need leverage. It just needs an act of Congress. Corporations are convenient fictions that exist at the pleasure of our legal system, which can be changed.
I agree that this could be done as it has happened before, but I don’t think anyone would go quietly. It’s expropriation without pay or eminent domain if it’s with pay, but I would expect a Supreme Court challenge if Congress came anywhere near this, either way.
https://en.wikipedia.org/wiki/State-owned_enterprises_of_the...
A nifty play would just be "the corporate veil is no longer free. Issue the state stock for a 49% stake, or your investors have unlimited liability." Then there's a theoretical "trade" but virtually nobody's going to say no.
In such a scenario, the US gov is only ~2% away from a 51% attack hostile takeover against any/every public company, depending on the kind of shares.
This is not likely.
That's the goal. Right now, public companies are far too governed by people who want the business to succeed at all costs.
The state could represent interests like "keeping high-paid jobs on-shore" or "avoid legal/labour/environmental standard arbitrage" that regular investors won't vote for.
works for venezuela and all other commie countries so you know, why don’t we try to become that too :)
the US has no leverage to demand 10% of healthcare companies' stocks.
US federal government is the biggest player in healthcare, by far. 32% of all healthcare spending is Federal government dollars. They have plenty of leverage. Bad if they use it, but they have it.
$900+ billion in Medicare yearly $600+ billion in Medicaid yearly
Why would the government taking a stake of the insurance companies be a benefit from the point of view of the federal government or the insurance companies?
What would the value add for either party be?
You said the government had no leverage, I am pointing out they have tremendous leverage. I said it would be bad to use the leverage, so I don't think there is a benefit.
> You said the government had no leverage, I am pointing out they have tremendous leverage.
That’s a fair point. I agree that my phrasing glosses over a bit of nuance. The political capital needed to reform the insurance companies would be hard to wrangle for anyone else but Trump, was my point. The government in many states regulates the insurance industry as far as rate increases and so on, so I’m sure they can apply pressure in many ways. I just don’t think that the government would do so, but they could in theory. I’m not sure they would in practice, but you were right to call me out.
Can recoup some of the completely unnecessary money poured into insurance companies that shouldn't exist.
That money almost seems like ill-gotten gains at this point. To a certain reading, it’s blood money.[0] If the insurance rates are too high, I don’t see how another cook in the kitchen is going to cook the books better, but I’m willing to believe that it could be a shakeup that might work. I just don’t have high hopes.
[0] https://en.wikipedia.org/wiki/Famine,_Affluence,_and_Moralit...
Don't worry, they're now using AI to deny claims.
The “US” you are referring to no longer exists. It has been replaced by a combo of North Korea and Venezuela :)
Most people in the US seem to not realize that a social healthcare system is better for all of them due to all of them sharing the bill.
Now only companies are left to pick up the bill, because a republican administration won't ever consider doing it.
I still wonder when CEOs will realize that lack of education and lack of healthcare will eventually land at their doorsteps because they won't have immigrant workforces anymore that can compensate for it.
> Most people in the US seem to not realize that a social healthcare system is better for all of them due to all of them sharing the bill.
As a high-income earner I used to be in favor of privatizing healthcare here in Italy/Europe.
I've always seen the public healthcare system wasteful and inefficient. Our healthcare system really is in a terrible spot.
Then few years ago, a very close friend of mine, had to give birth to her child. She had chosen one of the most expensive hospitals in the region, where there would be a huge staff all for her, not that crappy public service she would get.
Then tragedy struck: in all the luxury and care she was receiving, her newborn had huge problems staying alive, and died of respiratory issues few minutes after birth.
A very preventable death the autopsy stated moreover if she was in an appropriate public hospital.
Why? Because larger public hospitals have all a newborn reanimation unit with trained staff exactly for these kind of emergencies. Private ones? They are virtually non existent, doesn't matter the country or budget, no private hospital can afford such an expensive unit that requires extremely specific training and equipment but gets to act rarely if ever. So they don't exist in those contextes.
Since then I realized how naive I was: private healthcare just cannot justify investing in a huge amount of treatments that are a financial disaster for the private clinic/hospital. They just can't.
Thus, at the end of the day, you don't really want private healthcare that has to choose what to provide on a $ basis, you just don't. You want a as comprehensive and available public service that needs the right amount of money and incentives to work properly.
I don't know how can it be achieved, but you really don't want to be that father/mother, sister, friend or patient that cannot access an important procedure because it makes no financial sense to offer it.
> I still wonder when CEOs will realize that lack of education and lack of healthcare will eventually land at their doorsteps
Have you considered that they don't care? They can make a better profit now, so why worry about what is happening 5 to 10 years down the line?
Minor state capitalism, nit socialism.
Unless the workers own the means of production, it isn't socialism. The government is just another agent of capitalism here. Can we call this sparkling capitalism?
I think this war is lost. The word socialism means different things to different people. It all depends on where you stand and what you are looking at. If you are on the far right, most things the government does is socialism. If you are on the far left, everything the government does is to support capitalism. And in between the two everything goes.
I frequently say the same thing about the word Capitalism. (Communism too). They're second only to 'god' in terms of historical baggage.
If you say 'I like Capitalism', a significant minority will hear 'I love US imperialism and hate nature', despite that almost certainly not being what you meant. Similarly, if you say 'I like Communism', many hear 'I love dictators, gulags, 5 year plans and famine'.
A word of advice: if you actually want to have valuable political conversations with people, don't start by identifying yourself with ideology that's arguably responsible for various atrocities and millions of deaths.
> if you actually want to have valuable political conversations with people, don't start by identifying yourself with ideology that's arguably responsible for various atrocities and millions of deaths.
So neither capitalism nor communism? What's left, anarchism? I guess they haven't killed that many people.
The point is to stop making economic systems a part of your identity.
Talk about policies and their effects, not about what bucket you might put them (and yourself) in.
The reason we use labels (bucket) is to make the conversation easier. Imagine that every time you use a word that you first have to define what it means. My point is that the word 'socialism' has now become meaningless.
Indeed, labels aren't useless. But when a label means one thing to one person and a totally different thing to another, it actually becomes an impediment to communication and is best avoided.
Communists are anti-reformist. They don't believe that anything short of a violent revolution will change anything.
Oh and if you like reforms, then you are anti-revolutionary, which means you are reactionary, which means you are a fascist. Yep, that's the standard communist logic.
Socialism has nothing to do with government. It's an economic system not a governmental one.
Proving my point
> It's socialism, after all, for the Government to own an interest in a company.
> Covered yesterday on YC.[1]
> [1] https://news.ycombinator.com/item?id=44989773
The post from yesterday was news; this is commentary, as in, not a dupe.
To your point, it's arguably closer to state capitalism, which may be a distinction without a difference if you paint it with the same brush as socialism, but it's one worth mentioning.
https://en.wikipedia.org/wiki/State_capitalism
The name of the (sub)site we're posting on is HN; YC is the host. :P
The phrase "lemon socialism" used to be applied to the UK. The Government had managed to acquire the steel industry, the railroad industry, and the auto industry - all dying industries in the UK. They became British Steel, British Rail, and British Leyland. The end result wasn't good. They turned into jobs programs.
Eventually those were privatized. Now, the railroads are being socialized again.
It's a pendulum effect, with nationalization on one end, and privatization on the other. If capitalism and money itself is the best organizing principle that works around the world, it does limit the opportunities for change and growth. Socialism doesn't have a counter to the market principle, so they can only incorporate it. The US has a branding problem; freedom ain't free, but nobody even votes, so we earned what we got.
"capitalism with American characteristics"
> "capitalism with American characteristics"
China is trying to beat US at its own game. US (or at least its current political leader) is trying to beat Russia at its own game. Russia is trying to remain relevant. Russia is the muscle, China is the finance.
China needs Russia just like Google (Chrome) needs Firefox. Without Russia around, China would get all of the attention instead. Without Firefox existing, Google would have no counter to antitrust allegations in the web browser space.
Anything you can do, I can do better. I can do anything better than you.
No, not like that!
It's like that Spider-Man meme where everyone is Spider-Man pointing their fingers at each other. All the power structures are mirroring each other. It's all kayfabe, all the time. Everything is wrestling.
https://www.nytimes.com/2016/05/27/magazine/is-everything-wr... | https://archive.is/muwUp
Sure. Now make the same argument for TSMC, SMIC, and Samsung, and see if their governments listen.
All those three, from what I can see, is a bit different though. Samsung is basically a part of the government, because of its history. TSMC is the market leader, so it’s in government’s best interest to protect its future.
Chinese large scale investments are a bit different. It’s not just SMIC who gets a lot of funding, but others as well, so they can still compete with each other, until the winner is chosen and the others fade away. Similar to what is happening in EV market in China.
Intel… there is a decent chance that company fails even after this investment. They basically need to force other companies to use Intel chips instead of competitors for them to be viable at some point.
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Their governments don't operate under the same legal limits that the US government does.
But they operate in the same global market.
Yes. So there are two considerations. One is competitive balance internationally. That is a consideration.
But you also have to consider whether the government has the legal authority to make the investment. For a country claiming a limited government and the rule of law, that is a serious consideration.
You seem to be focused on the first consideration, but do not overlook the second one.
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> For a country claiming a limited government and the rule of law, that is a serious consideration.
I'll be blunt - I don't think anyone takes either of those seriously, not since Wickard v. Filburn in 1942.
GeekyBear gives a less blunt similar argument: https://news.ycombinator.com/item?id=45008439
America is drowning and reaching for anything to keep it afloat.
I can’t wait for the AI bubble to burst, its going to be hilarious.
Bernie Sanders is right:
The state should get equity for the money it spent on bailouts (or other purposes).
And this money should be put to work on social programs ;)
I’m pretty sure that many of the state’s bailouts have returned equity?
E.g., the government made money on the GM bailout.
When I read the comments I am getting the feeling that "socialism" is bad but nobody agrees what it is.
It's more that one of the talking points of the political right in the us is that socialism is bad, while the state owning means of production is a key idea of socialism. So Trump making this happen is very ironic.
Socialism for corporations and the rich, kleptocracy for everyone else.
There is nothing socialist about buying shares in a company. Workers do not control the means of production at Intel.
> Socialism for corporations and the rich
Aka late stage capitalism.
if Intel takes government money, they will need to take a Trump family member onto the board, right?
The US is trying CCP-style state-capitalism? Also, the glorious leader and great GOP chairman Trump gave his owners a great opportunity for insider trade. Last time be publicly bragged about it, too.
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https://www.wsj.com/opinion/uncle-sam-shouldnt-own-intel-sto...
neonate's archive link doesn't include the actual article, just the lede. I don't know why I can't reply to them, but I suspect it's because their post is pinned by mods, but it doesn't work properly for that purpose, so this may help:
https://pastebin.com/raw/vL07QfVi
neonate’s link has been updated since this post, so this thread is no longer timely.
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This level of commentary would be low level even for Reddit.
Haha, that's true.
Honestly, I wasn't expecting anyone to actually read this comment, as there were some quiet large discussions going on.
I was pretty much just joking around
typical tech bro - they don't want any government regulation and want all the federal dollars they can get for nothing in return. we shouldn't be giving tax payer money to any private or public profit driven corporation ever. Mind you that's also a libertarian principle but tech libertarians always leave that part off.
You guys would love it if Obama or Biden had done it.
I'm neutral in both cases actually. And last election I voted for the most left party I could find in my country.
Meh. You would have called it communism if Obama or Biden had done it.
That's probably true lol. More specifically socialism.
The handwringing over Trump continues and is completely unwarranted. Obama bailed out the entire banking industry to horrifying moral hazard. The US is bailing out Intel for national security reasons and taking a 10% stake is a better deal for US taxpayers than how typical bailouts like GM played out. Sheesh! It's like you can't even read a news story these days without seeing the anti-Trump bias programmed into the article.
It was Bush who signed the bailout bill, not Obama.
Obama had every opportunity to change the tune when he came into office but he doubled down on bailouts instead, so it's a kind of not that important who signed what.
I'm genuinely curious why you need to just randomly run out here and defend trump, one of the more indefensible humans of the past century?
Aside from the fact that Bush signed the banking bailout bill, not Obama, it is absolutely possible and reasonable to believe that -- on the differing merits of each case -- bailing out the banks was a good (even if fraught) idea, but that bailing out Intel is foolish.
I'm not in either camp at the moment, as I don't have a deep understanding of Intel or its finances, but I'm tired of people whining about how others could possibly have a different opinion about two similar but different events, separated by nearly two decades, as if this is some sort of "gotcha!" moment. It's not. Move on.
But even if -- let's just say if -- this Intel bailout were identical to the bank bailouts in every way... priors matter! Even someone who agreed with Bush back in 2008 that the bailouts were necessary, someone who was largely in agreement with much of what Bush did during his presidential terms... that person could very much disagree with what Trump has done in the past 7 months (as well as what he did 2017-2021), and that disagreement makes it entirely reasonable to question whether or not this particular move is a good decision. That's just... entirely normal.
So, the one bad thing that sticks out about what Trump is doing now, is that he's adding more conditions to the money that has already been legally disbursed by Congress. Under the CHIPS act, Intel is already eligible to receive the money; Trump is illegally adding more conditions for Intel to receive the money, after the fact. To do this legally, the act needs to be amended. As simple as that. Anything more than that is illegal.
Congress doesn't do it's job. If Congress had to deal with tariffs they wouldn't bother. That's why we're headed towards a dictatorship.
Completely unwarranted? lol
Totally unwarranted--you allowed Biden to be US President and he was mentally impaired the ENTIRE TIME and you were just fine with that, probably. So get over it! I had to. The absurdity of modern life is unbelievable.
Governments owning stocks feels like double dipping with a touch of socialism.
I get why the idea seems sane, you want to get returns on investments, right? But with governments the vehicle for returns is taxes and investments are often called "grants" (but also loans, credits, etc). The tax system means you can make investments and always get some return. FFS you could invest in a company going nowhere and you still recoup through taxes. The only way you lose in this system is by tanking the entire economy. Idk why this is so hard to understand. Why people think things like research grants is akin to tossing money into a pit and burning it.
I know the current party is anti tax but aren't they also anti nationalization (Words, not actions)? Changing (or adding) your returns vehicle to be through stock only creates nationalization. It increases returns but also puts an additional thumb on the scale. It's very short sighted.
Who knew socialism would come to America wrapped in an A̶m̶e̶r̶i̶c̶a̶n̶ capitalism flag?
What about this situation is related to workers controlling the means of production at Intel?
Given other examples worldwide, it's a minor form of state capitalism, not socialism because again there is nothing about workers (not just any taxpayers) controlling the means of production.
Forgive me, but I'm having a hard time reading this in any way that isn't equivalent to you declaring Scottland as fictional. It's not like there is exactly one form of socialism and anything that deviates from it in the slightest is capitalism.
It is in the definition of the word. I never said anything that deviates is capitalism though because one can make the same argument against that too.
Governments make regulations that command how companies operate and take taxes from companies. Governments already own significant stocks of companies in all but name.
If you make targeted grants, rebates, subsidies, etc, it even seems more fair to make taxing also targeted.
And is giving Intel subsidies and making Intel pay for it more socialist than giving Intel subsidies and making everyone pay for it?
Yes
Anyone here arguing that we should just let Intel fail in the market needs to understand that Intel is struggling right now partly because Asian nations like South Korea and Taiwan have for years subsidized their own chip making companies because they knew that in the long term, it was going to be an important strategic industry that would eventually be worth the effort and trouble. Now look where we are. Their long term strategy has paid off. Only TSMC is at the cutting edge, and Samsung is a fairly distant, but still reasonably close, secondary player.
Maybe there are better ways to prop up Intel besides the government taking a stake, but losing Intel would be a huge blow to American manufacturing interests. There's been a failure of strategic vision, both at Intel and in the American government. I think as a short term measure, taking a stake isn't the worst thing the government could do at this time.
Also to go off on a tangent a bit: this is one of the benefits of having a Trump-like character as President; he's clearly not beholden to any ideology and is extremely flexible when it comes to making policy decisions, even when a certain policy might be more at home with the opposing party or side of politics.
We have a $37 trillion dollar deficit. I think traditional government isn’t working and we need to find ways to raise revenue sooner rather than later before this spirals out of control.
We could raise corporate taxes. That would raise a lot of revenue.
We have taxes, but the current governing coalition is opposed to raising them.
Tariffs are taxes, they are not opposed to raising them, they just won't call them "taxes." It's honestly remarkable how effective they are in reaching their policy goals, because they understand their voter base extremely clearly. They know that their voters largely go off of key words, so by changing those words, one can make them support whatever policy one wants. It is amazing to witness, really.