4 ms·

> but not creating artificial barriers If a product is artificially cheap then making it more expensive is removing an artificiality, not adding one.

toomuchtodo 2y ago
"Artificial" is perspective, politics, and economics in this scenario. "The US allows VC backed firms to dump into markets below cost in an attempt at winner take all, but when another nation state does it, that is worse?" for example. TLDR What are you optimizing for, what are the incentives, and what is the intent of various actors. The math is the easy part, imho.
- Sabinus 2y ago
  VC expects a fair return, and they invest all over the world. When governments subsidize an industry their behaviours will be quite different.
  - seo-speedwagon 2y ago
    What’s it called when a government maintains a near-zero interest rate for years allowing that same VC money to prop up otherwise unprofitable tech companies? That’s a subsidy right?
    - rightbyte 2y ago
      Unlike communists they don't pretend to benefit us when they print money for the top of the pyramid.
- nyokodo 2y ago
  > when another nation state does it, that is worse? When the industry in question is crucial to retaining domestic industrial capacity to counter that foreign nation’s hostile geopolitical agenda, yes it is worse!
  - toomuchtodo 2y ago
    Then the industry should take a fair shot at serving the low end market instead of hiding behind tariffs, no? Or are we going to wait around while legacy auto only sells $40k-$80k combustion pickup trucks and SUVs and Tesla doesn’t build a Model 2? Protect markets for legitimate reasons, not out of domestic nepotism and laziness. BYD gets government support, US auto should get the same, but you actually have to show progress towards desired outcomes to justify cross border protectionism. https://pca.st/episode/830546d3-e3d5-42c7-9fb9-9710fc1604ac?t=252.0 https://pca.st/episode/830546d3-e3d5-42c7-9fb9-9710fc1604ac?... (citation wrt China EV not dumping)
    - nyokodo 2y ago
      > should take a fair shot at serving the low end market instead of hiding behind tariffs, no? That begs the question. They're only "hiding behind" tariffs if the price of Chinese manufacturing were fair in the first place but it's not. In this environment the Chinese manufacturers are economic aggressors and the Federal government is shielding local manufacturers from unfree competition.
seo-speedwagon 2y ago
A little google searching says BYD, for example, makes somewhere around $1250 in profit per vehicle. What do you mean by “artificially cheap”?

toomuchtodo 2y ago

"Artificial" is perspective, politics, and economics in this scenario. "The US allows VC backed firms to dump into markets below cost in an attempt at winner take all, but when another nation state does it, that is worse?" for example. TLDR What are you optimizing for, what are the incentives, and what is the intent of various actors. The math is the easy part, imho.

Sabinus 2y ago
VC expects a fair return, and they invest all over the world. When governments subsidize an industry their behaviours will be quite different.
- seo-speedwagon 2y ago
  What’s it called when a government maintains a near-zero interest rate for years allowing that same VC money to prop up otherwise unprofitable tech companies? That’s a subsidy right?
  - rightbyte 2y ago
    Unlike communists they don't pretend to benefit us when they print money for the top of the pyramid.
nyokodo 2y ago
> when another nation state does it, that is worse? When the industry in question is crucial to retaining domestic industrial capacity to counter that foreign nation’s hostile geopolitical agenda, yes it is worse!
- toomuchtodo 2y ago
  Then the industry should take a fair shot at serving the low end market instead of hiding behind tariffs, no? Or are we going to wait around while legacy auto only sells $40k-$80k combustion pickup trucks and SUVs and Tesla doesn’t build a Model 2? Protect markets for legitimate reasons, not out of domestic nepotism and laziness. BYD gets government support, US auto should get the same, but you actually have to show progress towards desired outcomes to justify cross border protectionism. https://pca.st/episode/830546d3-e3d5-42c7-9fb9-9710fc1604ac?t=252.0 https://pca.st/episode/830546d3-e3d5-42c7-9fb9-9710fc1604ac?... (citation wrt China EV not dumping)
  - nyokodo 2y ago
    > should take a fair shot at serving the low end market instead of hiding behind tariffs, no? That begs the question. They're only "hiding behind" tariffs if the price of Chinese manufacturing were fair in the first place but it's not. In this environment the Chinese manufacturers are economic aggressors and the Federal government is shielding local manufacturers from unfree competition.

seo-speedwagon 2y ago

A little google searching says BYD, for example, makes somewhere around $1250 in profit per vehicle. What do you mean by “artificially cheap”?