Comment by sobiolite
Comment by sobiolite a day ago
Ironic, Western politicians thought opening up to trade with China would lead to it adopting a Western model of government. Instead it's lead to the USA adopting the Chinese one.
Comment by sobiolite a day ago
Ironic, Western politicians thought opening up to trade with China would lead to it adopting a Western model of government. Instead it's lead to the USA adopting the Chinese one.
Yeah, this so weird coming from the US. The US government has a history of writing no-strings-attached blank cheques to people/companies just so avoid the stigma of government control in public companies.
I wonder how the markets will react, will stocks go up because people will assume Intel's going to be a government mandated champion or will they go down because of the negative connotations government control brings?
Name one literal no-strings-attached blank cheque to a large company in the last 20 years
Perhaps not strictly “no-strings-attached” but many of the 2008 bailouts were functionally mechanisms to avoid nationalisation.
Lol the jail free bailouts of the banks in 2008? Goldman got billions from the bailout of AIG, management got millions and millions in bonuses....
Those bailouts were generally loans that were paid back. Pretty far from a "no strings attached blank cheque".
The current Chinese model's basically you have fully publicly traded companies, companies who are either minority or majority owned by a certain provincial government and ones who are either minority or majority owned by the central government (although this is surprisingly rare outside of key areas like telco/banking)
Something like 60% of the top of 100 companies in China are entirely state-owned. Most of the rest are government stake
https://msadvisory.com/china-biggest-companies/
Look at this list - all the big ones here which are state owned are investment banks, petro companies and telcos.
Everyone else on the list (mainly internet companies, BYD, gaming, and B2C sales/distribution) is privately owned.
The US never owned a brewer, an airline, the major defense giants, etc.
"Air America was an American passenger and cargo airline established in 1946 and covertly owned and operated by the Central Intelligence Agency (CIA) from 1950 to 1976."
You need to study history. US government is no stranger in getting stakes in businesses. Did you already forget the Great Depression?
https://www.investopedia.com/articles/economics/08/governmen...
> We aren't anywhere close to being in a depression though.
This may be true in the economic sense. But “depression” is as much a political sensation as it is a technically defined economic term. We happen to live in an era where economics for the public is profoundly politicized.
It somewhat makes sense in terms of industries which are deemed strategically important. Intel needs to start thinking long term instead of short term profits.
OP didn’t make a value judgement about which model is better or makes more sense!
Intel has had a couple years of saying they were going into a more long term vision and failing, and it’s unclear how direct government ownership will make them get better at execution
if someone believes this, they should buy intel and just do it outright! But no one does because it's not as easy as "just think long term" - if it were, berkshire has the liquid money to buy intel several times over.
A large new powerful shareholder come in supporting long term thinking does make a difference.
Public shareholders are generally short term motivated.
One clear reason it doesn't make as much sense to Buffet is he wouldn't get the national security hedge that made the stock a buy for the government.
That's very cute quip but I notice that it places the blame on 'trade with China' for an alarming problem that is in fact entirely the doing of US voters expressing their values (or the lack of them) in fair elections.
A more interesting question is whether that voterbase's idea of what they were voting for does or doesn't line up with what they got.
It’s not “adopting” the Chinese model yet, so much as incoherently copying bits and pieces. If you want to run effective industrial policy you need sufficient state capacity and an army of technocrats who are experts on industrial policy. Trump’s second term performance gives no hope on both fronts.
Western governments have taken a stake in, nationalised, or owned / operated corporations for a very long time!
Some examples: VOC, BBC, national airlines, etc.
List across countries: https://en.wikipedia.org/wiki/List_of_government-owned_compa...
US specific: https://en.wikipedia.org/wiki/State-owned_enterprises_of_the...
Calling VOC an offshoot of a western government with any modern relevance is a HUMONGOUS stretch
We even have no assurance of keeping private property via civil asset forfeiture!
Private ownership was the adults main point of pride to distinguish from the Chinese when I was growing up.
And now the Chinese private property frameworks are closer to ours and ours are closer to theirs.
Civil forfeiture existed since 1660s, and was used initially to confiscate smugglers' vessels. Then it was dug out during Prohibition, and turned toxic in 1980s when the agencies doing the forfeiture (e.g. police) were allowed to keep the confiscated property. Ideally it should be used for restitution (e.g. to victims of fraud), but...
I suspect you were growing up when this was in full swing already.
We also have criminal forfeiture, which was leveraged a lot more then. Civil forfeiture use expanded dramatically in recent decades due to profit sharing with DOJ alongside court challenges failing, suggesting the need for constitutional amendment if awareness of the practice improves.
Both should have more reforms.
The Chinese have been surprisingly willing to let companies and sectors die even at the expense of growth (see real estate), I think it's honestly too charitable to compare the US to China, which has at least some degree of technocratic governance, the US went straight for something out of the Tropico franchise
We're living in the time of irony. Up is Down, Left is Right, Right is Left. Republicans have become Socialist. Free Speech absolutist now against Free Speech.
[flagged]