The investments listed here in the article make this seem like an effort to shore up or incentivize industries or companies that are integral to national defense. One example, in the ongoing US-China trade war one of the strongest moves China did was put [export controls on rare earth minerals][1] which are essential components across technology, defense, and healthcare to name a few. The government investing in these companies isn't ideal from a free enterprise perspective but seems rational from a national security perspective.
We are the country with the proven record as nefarious and backstabbing. This is, in fact, the reason why I am complaining in the first place and don't trust our state to represent our interests (long before I was born—this is a bipartisan problem).
It's quite amazing that we were the target of 9/11 and failed to learn a damn thing that might help us avoid another.
We’ll need a more apt parable for dueling superpowers and the effect on their citizens. Perhaps “The Giants and the Ants”, where the ants beseech the giants to stop stepping on them as they fight in the fields where they have built their nest. Each of the giants argue that if they look down to avoid stepping on the ants, their rival will gain advantage and win the duel. When the ants ask the giants why they must duel in the first place, the giants will not understand their question at all.
lmao who's the boy and who's the snake here? the US spent 40 years offshoring manufacturing to china for cheap labor to juice corporate profits, then acts shocked when china built industrial capacity we voluntarily handed them. if anyone got "bitten" it's because we sold the farm for fatter earnings reports.
Yes. This is called industrial policy, and there is bipartisan support for this. 2008 changed thinking on both sides of the aisle around leveraging state power to build industries.
Plenty of us Obama and Biden alums are industrial policy fans, and there is a similar cohort across the aisle.
The issues with this are precedent/slippery slope. Today it's a small stake in a small number of companies, but empirically government initiatives almost always grow. Once entrenched, I would be willing to bet that the government will take larger and larger stakes in a bigger and bigger number of companies until this model becomes a non-trivial, potentially dominant, share of the economy. I can see myself becoming a single-issue voter to oppose that future (although given bipartisan support I'm unlikely to have any options; maybe Rand Paul).
Anything is a slippery slope if you resign to it. It's not like governments have never been willing (or forced) to privatize or reduce their roles in markets. We are exchanging ideas on a government initiative
We desperately need a third party to displace one of these two. Having a state interest in industry is of course a great idea—telecoms, power generation, a base level of healthcare providers, pharmaceuticals, base level tech manufacturers are obvious things that should be state owned—but this just seems like an extension of the defense industry corruption (the "military industrial complex") that's plagued our country for many decades. Why am I paying to protect myself from china? Who will protect me from this one?
Exactly, few would oppose a stake in rare earths mining or something, but the more likely endgame of this is a government stake in companies like Google and Palantir. Which will inevitably lead to even more influence and “special access” privileges.
Edit: others have pointed out that the government likely already had investments in most of these tech firms through In-Q-Tel, which is also a potential issue, but that’s funding for small growing companies. It’s another matter entirely when government owns a percentage of our mature technology infrastructure.
I'm against the government having stake in any private company. It incentivizes the wrong behaviors. Regulations need to be written by a neutral party. Policy decisions need to be fair and balanced between the players in the market, not favoring one that they "own".
Right, it should simply compete on the open market with zero-margin public companies. A very straightforward way to incentivize efficient markets when other mechanisms fail. Not every industry and certainly not every process benefits from innovation—schumpeter, the father of the modern vc industry, was very emphatic about this.
There are many issues to have with this too, of course—the devil is in the details. If we implemented it today this process would look like paying five guys billions of dollars to pay northrup grumman slightly less to subcontract producing basic products to firms overseas anyway
I agree with you that it’s a bad idea, I just don’t think there are many in the US right now who care. And I myself have to grudgingly accept that industrial policy is probably going to happen in areas like strategic resources, even if I don’t like it. I just think it has to stop at a very low level, or you quickly end up with the government owning 25% of Blackrock in order to prop up the market.
Do I think we have that kind of restraint? No. It’s probably going to end up this way. Our future is all the bad parts of China without any of the good.
In most cases, same as an L6/7/8 SWE at Google MTV but at the upper rungs closer to L8/9/10 EM ar Google MTV. Use levels.fyi to look at the Google payscale.
Heck, I earn less as a VC today than if I remained a SWE or PM in my niche but with more stress and worse working hours.
Edit: Why the downvotes? Do y'all actually even know PE/VC and leadership salary scales?!?
I know it is not the same thing, but in case people aren't already aware, Alaskan residents have long owned stocks in private companies.
It is called the Alaska Permanent Fund and a constitutionally established sovereign wealth fund invested in a diversified portfolio and managed by a state-owned corporation, the Alaska Permanent Fund Corporation.
Earnings help fund the state government and annual dividend checks are distributed to residents.
I admitted as much, but I think a lot of people interested in the concept of government ownership of private corporations may enjoy broadening their knowledge and understanding of existing sovereign wealth funds within the United States.
I'm sorry if your interest wasn't piqued or you were already aware of the fund.
i think an important nuance and the reason we don't suddenly have a sovereign wealth fund is it’s not a centralized US Gov buying stakes. It’s a bunch of different government entities using different pools of capital
- Commerce dept: Intel, IBM quantum, GlobalFoundries, D-Wave, Rigetti, xLight
- Dept of "war": MP Materials for rare earths, L3Harris rocket motors for munitions
- Energy dept: Lithium Americas / Thacker Pass, Westinghouse nuclear
Excluding the White House, this is the correct approach. Each department and it's associated agencies have better domain experience in specific niches and access to capital.
This doesn't preclude the creation of a generalized SWF, but there is a difference between an SWF, SDF, and everything in-between.
This is the same approach Japan, South Korea, China, and India use as well.
There was a really interesting episode of EconTalk podcast about 6 years ago which had a guest (woman, if it helps find it) arguing that the US gov should invest in and have ownership of a lot more startups, similar to how they funded Tesla.
Investment is about voting/control, not just money.
From a purely financial perspective, federal taxation on companies would be similar to owning shares (except ≈preferential since the government usually gets paid first).
From a voting and control perspective, we usually don't want the government getting involved (the government should be using industry regulations, and avoiding trying to pick winners).
In New Zealand our government screws up everything it has an ownership stake in (notably electricity and rail).
> I guess preferential treatment could be the only issue?
I'm not sure it's the only issue, but for now focusing only on this issue: it's a really big issue. The R's often complained about Dems choosing winners and losers (IIRC related to the solar industry). This is now way beyond what the Dems were trying to do by advancing solar. The gov can use it's buying power to sway things towards Intel, for example, over AMD. Huge potential for conflict of interest that will distort the markets.
The other tangential issue is that in some cases these can look like bribes. For example, OpenAI "offering" 5% of their stock to the gov.
It creates a lot of perverse incentives, and is probably a bad idea in the long run. If the govt makes more money when intel is successful, then the govt is incentivized to sabotage Intel's competitors (e.g. through tariffs, export controls, and many other powers). This distorts the free market that is (allegedly) at the center of America's success
I read recently that corporate taxes used to be a lot higher on large conglomerated companies, which used to deter monopolization somewhat. Under this automatic-stake idea, it'd be interesting if the government's stake in corporations increased as they got larger? Companies try to avoid this and so don't combine so much?
Of course once the government does have a large stake in the largest monopoly-like companies, it's immensely motivated to keep them large. Hmm. This idea isn't good.
Just remember Piketty too, Capital in the 21st Century: the purpose is not generate revenue. Taxation's primary purpose is to prevent extreme concentrations of wealth & power, to diffuse the un-democratic dangers hazards and threats.
That's confusing. The rich make their money and hold their assets in economically productive (or extractive) enterprises. Land, factories, services, arms, etc are the real storehouses of wealth. If you take that from the rich, they have nothing.
I am not the original commenter, but I interpret it to mean that large corporations can almost always arrange it so that they don't pay tax or don't pay their fair share of tax. 88 companies paid $0 tax on $105B in profit in 2025[0]
I agree that corporate taxes are not working at this time for one specific country. But the claim of "corporate taxes don't work" is much more broad and not something I've seen specific evidence for. My understanding was that historically corporate taxes have been extremely effective, even if those taxes aren't paid the profits of a company are instead redirected as other investments.
For all the current US administration has complained about the opposition being “socialist,” they’ve certainly gone all-in on the state partially owning private companies.
Almost like cries of “socialism” have become a dog whistle instead of what the term actually means.
>> For all the current US administration has complained about the opposition being “socialist,”
Not a dog whistle when its actually true. How many more DSA candidates need to be elected before you stop saying this?
Candidates endorsed by the Democratic Socialists of America have scored victories in 35 primary elections so far this year, including upsets against entrenched incumbents.
The term "fascism" has undergone so much memetic drift that it verges on useless, but this does bear a striking resemblance to fascist corporatism [1], at least taken to the logical conclusion:
"A fascist corporation can be defined as a government-directed confederation of employers and employees unions, with the aim of overseeing production in a comprehensive manner. Theoretically, each corporation within this structure assumes the responsibility of advocating for the interests of its respective profession, particularly through the negotiation of labor agreements and similar measures."
A lot of dystopian literature has been written with the premise that governments would wither away and end up replaced by mega-corporations that become the de facto law. I suppose the theory where the government just buys all the corporations instead because they control the money supply was generally overlooked by those authors. The end result probably isn't much different, but the path to get there has some differences, I suppose. It also seems reasonable to say that the authors, not being from the finance world (at least that I know of) may not have realized the depths to which financial engineering would sink and the willingness of the governments to participate in it.
Back in the 1980s when cyberpunk was really thriving the government at least made mouth noises about fighting the worst excesses of financial engineering. Whether history bears that out as something they were actually doing, the reader is welcome to come to their own conclusions about. But the government at least tried to look like a countervailing force to financial engineering.
Really? It is quite fashionable to call the US fascist while going gaga at other countries that have similar or worse conditions. Let me bring receipts.
The most striking difference is that top investors in Europe hold much higher stakes than in the United States. The top ten in Europe features several governments.
Far from the same thing. Most of these are ex government monopolies, some still are. We also don't have dictators taking over all parts of our governments. Hitler did join forces with industrialists.
Norway is far ahead in this, they collect lots of tax from poor and avg. people yet they have the biggest wealth fund in the world. literally only benefits certain groups
The story is that states have some very large number of little bits of money with and without purpose all parked with investment companies. The total sum was argued to be so large the government owns a large share of the economy.
I like the idea of getting a slice of the action for the country. I mean, to have a nice slice of profits or something would be really nice. You know the equity is nice in that only pays off if there are profits. What would be even nicer is just a nice permanent claim on profits, like 20% or something like that....don't we call that a tax rate? /s
we're definitely noticing things under Democrats we'd say "sure, let the government figure out" and things under All republicans: "No, fuck that, you're just assholes trying to turn children into well heeled religious fundamentalists".
Now the government has an extra incentive to get rid of unions entirely so that the company (and the government shareholder) makes more money. So yes, option B.
They also have an incentive to use legal pressure to suppress competitors. But I am sure this (and other administrations) would never throw their weight around for fun and profit. /s
There is bipartisan support for industrial policy.
2008 shaped our thinking on this and most of our policymakers in the 19th century were influence by Alexander Hamilton and Fredrich List.
Our allies (Japan, South Korea) as well as our competitors (China) use this as well, and so did the US until the 1990s.
I support the CHIPS Act and IRA. I also support building an American SWF as well as operationalizing state-managed SWFs and pension funds into SDFs as well. And so do most decisionmakers who were in the Obama and Biden admins as well as the Trump admin.
Edit: can't reply
> so I'm not sure we should shape all of our policy
What I mean is pre-2008 it was heterodox to assume that government capital could be deployed to build or rebuild industries.
The default assumption was industrial policy only succeeded once (Japan).
The mixture of public-private subsidizes at the state level to develop GreenTech clusters in TX and CA, Semiconductor clusters in AZ, NatGas and Oil production in the Dakotas, and other such "booms" in the 2010s compared to Germany's hard stance on austerity leading to deindustrialization and China catching up to Germany in a number of core industrial technologies influenced the newish generation of policymakers.
So do I. As I understand it, those bills involved incentives that any company could access provided that they met the conditions (manufacture in US, etc). The IRA also provided direct incentives to consumers to spend their money as they saw fit (EVs, solar, heat pumps, etc).
Direct investment by the executive branch is something else entirely. For example, Intel is now blessed and too big to fail. Why would anyone start a competitor to it? If you did start a competitor, your first call would be to Commerce, right? Seems like a heaping dose of moral hazard.
I can understand direct investment in very narrow circumstances, such as rare earth minerals and possibly something like nuclear power generation.
An alternative is a truly-independent sovereign wealth fund, or independently-governed pension investment arm such as the Canada Pension Plan Investment Board. But I doubt, in light of the Humphrey's Executor decision, that it's possible for the United States to create such an entity now.
I've seen this assertion a few times now in the thread here, can you elaborate? The events of 2008 were kind of extraordinary, so I'm not sure we should shape all of our policy based on that - except in terms of trying to avoid another 2008/Great Recession, but I don't see these actions doing that.
Socialism is the workers owning the means of production. There is nothing here where workers own it except only incidentally via employers issuing stock options and RSUs.
Have we come full circle now with China inspired by American Capitalism to create their own model of it, that now inspires the Americans to imitate the Chinese?
Yes, we've been copying the Chinese in a few cases in the past 6 years. I think they're the early warning signs of cultural dominance. Sort of like how a tin-pot African dictator in the 1980s would have an over-the-top western-style military uniform.
I'll bite, because this is HN and I think there's more space for genuine discussion here, not because I desire to be right.
First, addressing my first point about how this is "the modern equivalent of an ad hominem attack". The commenter is complaining as if Claude basically came up with this entire thing itself. Very very seldom is that actually how things get created, at least in my experience. Yes there's the potential for someone to say something stupid like "Claude, generate me a blog post about something", and Claude can do it. But that's such a weird way to relate to any content that was in-part authored by AI. That just isn't how virtually everyone I know is using the tools, so it's a disingenuous take.
Second, I find your dismissal of the aptness of using the phrase "ad hominem" attack reductive here because yes, AI is not a human, but two points here:
1) I'm going to give the true OP the benefit of the doubt, that they used AI as a tool for helping develop and hone their thoughts, and AI wasn't just set off in a black box
2) AI can produce novel ideas, and can produce the output of thought, even if it isn't producing it the same ways our brains think
If the US government got nonvoting shares in startups along with VC's then that could bring in lots of revenue from capital gains without calling it "taxes."
If it were in return for a tax break then they might even do it voluntarily. The key would be to get in while valuation is low.
What capital gains? The governments balance sheet doesn't matter...
Think of it like the original Bitcoin wallet, its value is $0 because none of those will ever be sold.
If dividends are involved it could matter but the government basically gets 20% of dividends already and extra 4% doesn't make a huge difference.
Returning to blocking stock buybacks as price manipulation and forcing businesses to give out dividends again would actually impact revenue in a meaningful way in contrast.
Dividends and stock buybacks are equivalent except for the tax consequences. Money is flowing from the company to investors. If, say, the government had 20% of the stock and sold it into the buyback to remain at 20%, that's similar to a dividend.
So this ends up being equivalent to taxes on both dividends and buybacks (and other economic participation like buyouts from mergers), except that no investor in particular has to pay the tax.
I am happy with this. There needs to be more democratic control of the economy, as the people who have been running American countries have been consistently making decisions that are against the national interest. There's risk to it, but the status quo is not something to be happy about either.
The investments listed here in the article make this seem like an effort to shore up or incentivize industries or companies that are integral to national defense. One example, in the ongoing US-China trade war one of the strongest moves China did was put [export controls on rare earth minerals][1] which are essential components across technology, defense, and healthcare to name a few. The government investing in these companies isn't ideal from a free enterprise perspective but seems rational from a national security perspective.
[1]: https://en.wikipedia.org/wiki/Rare_earths_trade_dispute
Seems like it'd be a lot cheaper to work with china rather than pretend like they're going to attack us.
When it comes to China it's best to remember the Boy and the Rattlesnake Story.
We are the country with the proven record as nefarious and backstabbing. This is, in fact, the reason why I am complaining in the first place and don't trust our state to represent our interests (long before I was born—this is a bipartisan problem).
It's quite amazing that we were the target of 9/11 and failed to learn a damn thing that might help us avoid another.
Is the USA the rattlesnake? Because who has china bitten? The USA is in constant war.
We’ll need a more apt parable for dueling superpowers and the effect on their citizens. Perhaps “The Giants and the Ants”, where the ants beseech the giants to stop stepping on them as they fight in the fields where they have built their nest. Each of the giants argue that if they look down to avoid stepping on the ants, their rival will gain advantage and win the duel. When the ants ask the giants why they must duel in the first place, the giants will not understand their question at all.
Belling the Cat comes to mind.
wrong metaphor, read leviathan by hobbes. It's all ants.
lmao who's the boy and who's the snake here? the US spent 40 years offshoring manufacturing to china for cheap labor to juice corporate profits, then acts shocked when china built industrial capacity we voluntarily handed them. if anyone got "bitten" it's because we sold the farm for fatter earnings reports.
I mean they could, they aren't a democracy and could easily fall back into Maoism with the next regime change
Yes. This is called industrial policy, and there is bipartisan support for this. 2008 changed thinking on both sides of the aisle around leveraging state power to build industries.
Plenty of us Obama and Biden alums are industrial policy fans, and there is a similar cohort across the aisle.
The issues with this are precedent/slippery slope. Today it's a small stake in a small number of companies, but empirically government initiatives almost always grow. Once entrenched, I would be willing to bet that the government will take larger and larger stakes in a bigger and bigger number of companies until this model becomes a non-trivial, potentially dominant, share of the economy. I can see myself becoming a single-issue voter to oppose that future (although given bipartisan support I'm unlikely to have any options; maybe Rand Paul).
Anything is a slippery slope if you resign to it. It's not like governments have never been willing (or forced) to privatize or reduce their roles in markets. We are exchanging ideas on a government initiative
Not anything. There are domains where precedents empirically don’t balloon and domains where they do. Federal government is nearly always the latter.
Yeah, this is how you get an oligarch system.
We desperately need a third party to displace one of these two. Having a state interest in industry is of course a great idea—telecoms, power generation, a base level of healthcare providers, pharmaceuticals, base level tech manufacturers are obvious things that should be state owned—but this just seems like an extension of the defense industry corruption (the "military industrial complex") that's plagued our country for many decades. Why am I paying to protect myself from china? Who will protect me from this one?
Exactly, few would oppose a stake in rare earths mining or something, but the more likely endgame of this is a government stake in companies like Google and Palantir. Which will inevitably lead to even more influence and “special access” privileges.
Edit: others have pointed out that the government likely already had investments in most of these tech firms through In-Q-Tel, which is also a potential issue, but that’s funding for small growing companies. It’s another matter entirely when government owns a percentage of our mature technology infrastructure.
I'm against the government having stake in any private company. It incentivizes the wrong behaviors. Regulations need to be written by a neutral party. Policy decisions need to be fair and balanced between the players in the market, not favoring one that they "own".
Right, it should simply compete on the open market with zero-margin public companies. A very straightforward way to incentivize efficient markets when other mechanisms fail. Not every industry and certainly not every process benefits from innovation—schumpeter, the father of the modern vc industry, was very emphatic about this.
There are many issues to have with this too, of course—the devil is in the details. If we implemented it today this process would look like paying five guys billions of dollars to pay northrup grumman slightly less to subcontract producing basic products to firms overseas anyway
I agree with you that it’s a bad idea, I just don’t think there are many in the US right now who care. And I myself have to grudgingly accept that industrial policy is probably going to happen in areas like strategic resources, even if I don’t like it. I just think it has to stop at a very low level, or you quickly end up with the government owning 25% of Blackrock in order to prop up the market.
Do I think we have that kind of restraint? No. It’s probably going to end up this way. Our future is all the bad parts of China without any of the good.
I'd be curious as to how much the executives at these firms earn (whether it be through salary or equity or whatever else).
In most cases, same as an L6/7/8 SWE at Google MTV but at the upper rungs closer to L8/9/10 EM ar Google MTV. Use levels.fyi to look at the Google payscale.
Heck, I earn less as a VC today than if I remained a SWE or PM in my niche but with more stress and worse working hours.
Edit: Why the downvotes? Do y'all actually even know PE/VC and leadership salary scales?!?
I think many don’t so why not just say the numbers.
As long as we're socializing the gains just the same as we're socializing the losses (through taxpayer-funded bailouts), I have no problem.
That's unfortunately not been the reality through Obama, Trump and Biden policies.
I know it is not the same thing, but in case people aren't already aware, Alaskan residents have long owned stocks in private companies.
It is called the Alaska Permanent Fund and a constitutionally established sovereign wealth fund invested in a diversified portfolio and managed by a state-owned corporation, the Alaska Permanent Fund Corporation.
Earnings help fund the state government and annual dividend checks are distributed to residents.
it is not the same thing :)
I admitted as much, but I think a lot of people interested in the concept of government ownership of private corporations may enjoy broadening their knowledge and understanding of existing sovereign wealth funds within the United States.
I'm sorry if your interest wasn't piqued or you were already aware of the fund.
i think an important nuance and the reason we don't suddenly have a sovereign wealth fund is it’s not a centralized US Gov buying stakes. It’s a bunch of different government entities using different pools of capital
- Commerce dept: Intel, IBM quantum, GlobalFoundries, D-Wave, Rigetti, xLight
- Dept of "war": MP Materials for rare earths, L3Harris rocket motors for munitions
- Energy dept: Lithium Americas / Thacker Pass, Westinghouse nuclear
- White House: U.S. Steel golden share
Excluding the White House, this is the correct approach. Each department and it's associated agencies have better domain experience in specific niches and access to capital.
This doesn't preclude the creation of a generalized SWF, but there is a difference between an SWF, SDF, and everything in-between.
This is the same approach Japan, South Korea, China, and India use as well.
There was a really interesting episode of EconTalk podcast about 6 years ago which had a guest (woman, if it helps find it) arguing that the US gov should invest in and have ownership of a lot more startups, similar to how they funded Tesla.
Investment is about voting/control, not just money.
From a purely financial perspective, federal taxation on companies would be similar to owning shares (except ≈preferential since the government usually gets paid first).
From a voting and control perspective, we usually don't want the government getting involved (the government should be using industry regulations, and avoiding trying to pick winners).
In New Zealand our government screws up everything it has an ownership stake in (notably electricity and rail).
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You should look into In-Q-Tel.
I’m not sure if I’m supposed to be against this but it seems like if the percentage is limited and they’re non voting shares then it should be ok.
I guess preferential treatment could be the only issue?
> I guess preferential treatment could be the only issue?
I'm not sure it's the only issue, but for now focusing only on this issue: it's a really big issue. The R's often complained about Dems choosing winners and losers (IIRC related to the solar industry). This is now way beyond what the Dems were trying to do by advancing solar. The gov can use it's buying power to sway things towards Intel, for example, over AMD. Huge potential for conflict of interest that will distort the markets.
The other tangential issue is that in some cases these can look like bribes. For example, OpenAI "offering" 5% of their stock to the gov.
> The gov can use it's buying power to sway things towards Intel, for example, over AMD
Pretty sure that's the goal: the government wants a competent cutting edge chip maker on US soil.
> The gov can use it's buying power to sway things towards Intel, for example, over AMD.
Well, Intel is actually important for national defense because of their foundries...
Whereas AMD sold their foundries long ago so now they're just one of many fabless chip designers.
Corporate taxes don't work and taxing the rich is super hard. Could this be a way for the state to suplement tax revenue?
It creates a lot of perverse incentives, and is probably a bad idea in the long run. If the govt makes more money when intel is successful, then the govt is incentivized to sabotage Intel's competitors (e.g. through tariffs, export controls, and many other powers). This distorts the free market that is (allegedly) at the center of America's success
The answer is probably an automatic state in any company over a specific size given to the government. The only competition is then international.
Still perverse incentives. In this case the government is implicitly biased against startups competing against a giant.
I read recently that corporate taxes used to be a lot higher on large conglomerated companies, which used to deter monopolization somewhat. Under this automatic-stake idea, it'd be interesting if the government's stake in corporations increased as they got larger? Companies try to avoid this and so don't combine so much?
Of course once the government does have a large stake in the largest monopoly-like companies, it's immensely motivated to keep them large. Hmm. This idea isn't good.
Reinventing Socialism from first principals
See also: confessions of an economic hitman, the mysterious affair of Olivetti
US government has always had a policy of sabotaging international competition
No, not enough money in it.
Tax the rich.
Just remember Piketty too, Capital in the 21st Century: the purpose is not generate revenue. Taxation's primary purpose is to prevent extreme concentrations of wealth & power, to diffuse the un-democratic dangers hazards and threats.
The rich already pay most of the income tax in our country. We probably have the most progressive tax system in the world.
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That's confusing. The rich make their money and hold their assets in economically productive (or extractive) enterprises. Land, factories, services, arms, etc are the real storehouses of wealth. If you take that from the rich, they have nothing.
> Corporate taxes don't work
What does this mean?
I am not the original commenter, but I interpret it to mean that large corporations can almost always arrange it so that they don't pay tax or don't pay their fair share of tax. 88 companies paid $0 tax on $105B in profit in 2025[0]
[0] https://itep.org/88-profitable-corporations-paid-zero-income...
I agree that corporate taxes are not working at this time for one specific country. But the claim of "corporate taxes don't work" is much more broad and not something I've seen specific evidence for. My understanding was that historically corporate taxes have been extremely effective, even if those taxes aren't paid the profits of a company are instead redirected as other investments.
Related today:
OpenAI ‘in early talks to give 5% stake to US government’
https://news.ycombinator.com/item?id=48759623
Isn't that just socialism without the social benefits?
Been like this since the GFC: the rich have a government funded undo button they can press whoever they need to.
It's been the status quo for a while now - https://www.pbs.org/newshour/economy/trillions-of-dollars-in...
https://en.wikipedia.org/wiki/State_capitalism
Pretty much.
For all the current US administration has complained about the opposition being “socialist,” they’ve certainly gone all-in on the state partially owning private companies.
Almost like cries of “socialism” have become a dog whistle instead of what the term actually means.
>> For all the current US administration has complained about the opposition being “socialist,”
Not a dog whistle when its actually true. How many more DSA candidates need to be elected before you stop saying this?
Candidates endorsed by the Democratic Socialists of America have scored victories in 35 primary elections so far this year, including upsets against entrenched incumbents.
https://www.washingtonexaminer.com/news/campaigns/congressio...
Those people haven't been elected at all, yet.
And at what level are they? Aren't there over half a million elected officials, one way or another, in the USA?
There are nearly twenty thousand at state level or above.
The term "fascism" has undergone so much memetic drift that it verges on useless, but this does bear a striking resemblance to fascist corporatism [1], at least taken to the logical conclusion:
"A fascist corporation can be defined as a government-directed confederation of employers and employees unions, with the aim of overseeing production in a comprehensive manner. Theoretically, each corporation within this structure assumes the responsibility of advocating for the interests of its respective profession, particularly through the negotiation of labor agreements and similar measures."
A lot of dystopian literature has been written with the premise that governments would wither away and end up replaced by mega-corporations that become the de facto law. I suppose the theory where the government just buys all the corporations instead because they control the money supply was generally overlooked by those authors. The end result probably isn't much different, but the path to get there has some differences, I suppose. It also seems reasonable to say that the authors, not being from the finance world (at least that I know of) may not have realized the depths to which financial engineering would sink and the willingness of the governments to participate in it.
Back in the 1980s when cyberpunk was really thriving the government at least made mouth noises about fighting the worst excesses of financial engineering. Whether history bears that out as something they were actually doing, the reader is welcome to come to their own conclusions about. But the government at least tried to look like a countervailing force to financial engineering.
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Really? It is quite fashionable to call the US fascist while going gaga at other countries that have similar or worse conditions. Let me bring receipts.
https://www.econstor.eu/bitstream/10419/263159/1/1815112018....
https://en.wikipedia.org/wiki/Category:Government-owned_comp...Do you want to apply the word you had in mind to those governments too?
Far from the same thing. Most of these are ex government monopolies, some still are. We also don't have dictators taking over all parts of our governments. Hitler did join forces with industrialists.
> Most of these are ex government monopolies, some still are.
It makes them even worse if you are defining fascism. Look up Italy when fascism was alive.
> We also don't have dictators taking over all parts of our governments
Because they are already in charge.
Fascism is just this one thing right?
Thanks Obama.
Closer to fascism, socialism implies the workers own the means of production to an extent
In Fascism, the national workers own the means of production by proxy through the Fascist party. Directly inspired by democratic centralism, btw.
Norway is far ahead in this, they collect lots of tax from poor and avg. people yet they have the biggest wealth fund in the world. literally only benefits certain groups
That certain groups being everybody, since they use the interest from the fund to put into the general government budget.
At least we might get better nuclear out of this, assuming it's not as hilariously corrupt as our government contracting schemes are.
How many casinos?
I still wonder if the CAFR CONSPIRACY is true.
The story is that states have some very large number of little bits of money with and without purpose all parked with investment companies. The total sum was argued to be so large the government owns a large share of the economy.
More here https://www.cfr.org/articles/washingtons-growing-portfolio-t...
Can we get a breakdown on how this benefits the average US citizen? Other than vibes and "better us than them"
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I like the idea of getting a slice of the action for the country. I mean, to have a nice slice of profits or something would be really nice. You know the equity is nice in that only pays off if there are profits. What would be even nicer is just a nice permanent claim on profits, like 20% or something like that....don't we call that a tax rate? /s
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Communism with American Characteristics
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I need people to understand that 1860s Republicans and 2020s Republicans are somewhat different. I'm begging at this point.
They’d roll in their graves if they knew the party eventually turned into monarchists.
Somewhat might be the understatement of the century.
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Fascism? Skip it and go full socialism.
those are on two completely different sides of the political compass
Not really. Specially Italian Fascism.
we're definitely noticing things under Democrats we'd say "sure, let the government figure out" and things under All republicans: "No, fuck that, you're just assholes trying to turn children into well heeled religious fundamentalists".
It's obviously clear attitude is everything.
Now the government has an extra incentive to get rid of unions entirely so that the company (and the government shareholder) makes more money. So yes, option B.
They also have an incentive to use legal pressure to suppress competitors. But I am sure this (and other administrations) would never throw their weight around for fun and profit. /s
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It is when capitalists own the means of production.
Repeating outdated tropes ad nauseum is dumb.
There is bipartisan support for industrial policy.
2008 shaped our thinking on this and most of our policymakers in the 19th century were influence by Alexander Hamilton and Fredrich List.
Our allies (Japan, South Korea) as well as our competitors (China) use this as well, and so did the US until the 1990s.
I support the CHIPS Act and IRA. I also support building an American SWF as well as operationalizing state-managed SWFs and pension funds into SDFs as well. And so do most decisionmakers who were in the Obama and Biden admins as well as the Trump admin.
Edit: can't reply
> so I'm not sure we should shape all of our policy
What I mean is pre-2008 it was heterodox to assume that government capital could be deployed to build or rebuild industries.
The default assumption was industrial policy only succeeded once (Japan).
The mixture of public-private subsidizes at the state level to develop GreenTech clusters in TX and CA, Semiconductor clusters in AZ, NatGas and Oil production in the Dakotas, and other such "booms" in the 2010s compared to Germany's hard stance on austerity leading to deindustrialization and China catching up to Germany in a number of core industrial technologies influenced the newish generation of policymakers.
> For this specific industrial policy
Yes [0][1][2][3].
[0] - https://www.bloomberg.com/news/articles/2024-09-06/biden-aid...
[1] - https://www.nytimes.com/2024/09/10/us/politics/us-sovereign-...
[2] - https://www.yalejournal.org/publications/wealth-and-diplomac...
[3] - https://irs.princeton.edu/industrial-policy-united-states
> I support the CHIPS Act and IRA
So do I. As I understand it, those bills involved incentives that any company could access provided that they met the conditions (manufacture in US, etc). The IRA also provided direct incentives to consumers to spend their money as they saw fit (EVs, solar, heat pumps, etc).
Direct investment by the executive branch is something else entirely. For example, Intel is now blessed and too big to fail. Why would anyone start a competitor to it? If you did start a competitor, your first call would be to Commerce, right? Seems like a heaping dose of moral hazard.
I can understand direct investment in very narrow circumstances, such as rare earth minerals and possibly something like nuclear power generation.
An alternative is a truly-independent sovereign wealth fund, or independently-governed pension investment arm such as the Canada Pension Plan Investment Board. But I doubt, in light of the Humphrey's Executor decision, that it's possible for the United States to create such an entity now.
> 2008 shaped our thinking on this
I've seen this assertion a few times now in the thread here, can you elaborate? The events of 2008 were kind of extraordinary, so I'm not sure we should shape all of our policy based on that - except in terms of trying to avoid another 2008/Great Recession, but I don't see these actions doing that.
> There is bipartisan support for industrial policy.
For this specific industrial policy? The Intel deal was an outright shakedown.
There's bipartisan support for healthcare, too. Unfortunately, quite a bit of serious dissension on exactly what that means.
edit: Yes [0][1][2][3].
So, no. Not the "pick random companies and extort shares out of them" approach.
this is why democrats are so stupid to use the word socialist even though it's accurate
sovereign funds, federal ownership making companies "too big to fail" is 100% socialism
but republicans are devious enough to know not to call it that
so do we get to idiotically slur the current administration and call them communists?
Socialism is the workers owning the means of production. There is nothing here where workers own it except only incidentally via employers issuing stock options and RSUs.
It’s “100% socialism” in your definition and 20% in someone else’s. Its pretty tiring constantly debating these words.
Have we come full circle now with China inspired by American Capitalism to create their own model of it, that now inspires the Americans to imitate the Chinese?
Yes, we've been copying the Chinese in a few cases in the past 6 years. I think they're the early warning signs of cultural dominance. Sort of like how a tin-pot African dictator in the 1980s would have an over-the-top western-style military uniform.
Coming soon, electronic billboards with photos of people who didn’t pay their student loans.
> Article research and generated imagery enabled by AI tools including Claude by Anthropic.
*sigh*
The modern equivalent of an ad hominem attack. Do better.
There's literally no hominem being attacked.
If you want human attention, expend human labour.
What a reductive take - attack the argument or move on.
Tbf, they are saying the argument isn't worth engaging to begin with (not that I agree with)
I did. you failed to understand.
I'll bite, because this is HN and I think there's more space for genuine discussion here, not because I desire to be right.
First, addressing my first point about how this is "the modern equivalent of an ad hominem attack". The commenter is complaining as if Claude basically came up with this entire thing itself. Very very seldom is that actually how things get created, at least in my experience. Yes there's the potential for someone to say something stupid like "Claude, generate me a blog post about something", and Claude can do it. But that's such a weird way to relate to any content that was in-part authored by AI. That just isn't how virtually everyone I know is using the tools, so it's a disingenuous take.
Second, I find your dismissal of the aptness of using the phrase "ad hominem" attack reductive here because yes, AI is not a human, but two points here:
1) I'm going to give the true OP the benefit of the doubt, that they used AI as a tool for helping develop and hone their thoughts, and AI wasn't just set off in a black box
2) AI can produce novel ideas, and can produce the output of thought, even if it isn't producing it the same ways our brains think
In that case I'll have my ai read it and decide if it's worth informing me of any key points.
Hey, we're gonna buy 10% of ....in a week.
Thanks dad.
VEB OpenAI next?
Shall I dig out my Auferstanden aus Ruinen vinyl?
VEB = Public Owner Enterprise of former East Germany https://en.wikipedia.org/wiki/Volkseigener_Betrieb
If the US government got nonvoting shares in startups along with VC's then that could bring in lots of revenue from capital gains without calling it "taxes."
If it were in return for a tax break then they might even do it voluntarily. The key would be to get in while valuation is low.
What capital gains? The governments balance sheet doesn't matter...
Think of it like the original Bitcoin wallet, its value is $0 because none of those will ever be sold.
If dividends are involved it could matter but the government basically gets 20% of dividends already and extra 4% doesn't make a huge difference.
Returning to blocking stock buybacks as price manipulation and forcing businesses to give out dividends again would actually impact revenue in a meaningful way in contrast.
Dividends and stock buybacks are equivalent except for the tax consequences. Money is flowing from the company to investors. If, say, the government had 20% of the stock and sold it into the buyback to remain at 20%, that's similar to a dividend.
So this ends up being equivalent to taxes on both dividends and buybacks (and other economic participation like buyouts from mergers), except that no investor in particular has to pay the tax.
"Ignoring tax consequences" when talking about government funding? That makes your entire response worthless.
The government would need to sell their position in order to have gains.
I am happy with this. There needs to be more democratic control of the economy, as the people who have been running American countries have been consistently making decisions that are against the national interest. There's risk to it, but the status quo is not something to be happy about either.
> There needs to be more democratic control of the economy…
And you think this is that? Oh dear.
> the people who have been running American countries have been consistently making decisions that are against the national interest
Freudian slip?
> And you think this is that? Oh dear.
I don't care how it starts. I'm tried of the kind of people who ideologically oppose government control.
> Freudian slip?
Autocorrect typo for companies, obviously.
> I don't care how it starts. I'm tried of the kind of people who ideologically oppose government control.
Agreed to the latter; ooof to the former. I absolutely think government can, and should, do more for the people. But the what of it matters.
> Autocorrect typo for companies, obviously.
Obviously. I just thought it was funny.