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This whole economy by corruption and coercion is not going to work out.
by duxup 1y ago
This whole economy by corruption and coercion is not going to work out.
- FirmwareBurner 1y agoI don't see how it can't work at least short term, when the US is by a long margin the world leading military and economic power. Why else has the US been overspending on military for decades and planting military bases and nuclear submarines all over the world, to become the world hegemony, if not to bully everyone in doing its bidding when push comes to shove? I'm not defending the actions of the US, I'm just asking what are the other countries gonna do about it? Ally with Cuba, China, Iran and Russia to fight the US? Unlikely. UK, Canada, Australia, New Zeeland are 5 eyes members and therefore lapdogs of the US, and the EU as much as they dislike the US due to Trump, has a laundry list of urgent domestic issues like Russia, no cheap energy, no high growth industry like tech, ageing population, economic stagnation or even decline, collapsing welfare and pension system, illegal immigration leading to a rise right wing extremism leading to crackdowns on freedom of speech and censorship leading to further social and political turmoil. So how is the EU gonna retaliate when they can't even keep themselves together? What can they do now, when the US holds all the cards? Their only hope can be that the US collapses from internal issues, just like the Roman empire, but until then, they literally have no screws to turn on the US and just like the EU, Switzerland, etc, are forced to accept the terms of the US or have their already fragile economies suffer even more.
- nemomarx 1y agoChina seems to be working on catching up, and if you remove all of your soft power maybe they look more attractive?
- exasperaited 1y agoOh and TSMC is on an island they claim is their own. Great: an Intel that has TSMC as its largest single shareholder is essentially wholly under the thumb of the State Department.
- dismalaf 1y ago> Great: an Intel that has TSMC as its largest single shareholder is essentially wholly under the thumb of the State Department. They already are. The US defence industry buys from them no matter what. Which is why the US needs to ensure their survival. The concern isn't that Intel survives or not (the US would prop them up no matter what), but that they also remain on the cutting edge and the US doesn't lose out if, say, Taiwan falls to China.
- notahacker 1y agoAbsolutely. Everything the OP mentions as a reason to continue trading with the US is also a reason for Europe to trade more with China. Historically the argument for not doing that is "look at their very different values and how they bully and threaten their neighbours, and remember that if you do business there their government will happily crush you with its arbitrary power as soon as you step out of line and even at the import/export any trade deals they do make will be them openly trying to screw you" The US isn't exactly in a strong position to continue making those arguments about why the world's other superpower is different with a straight face. The US doesn't need to be cut out of world trade altogether (it won't be obviously) to lose a lot at the margin, with the chief beneficiaries ironically being the country the current US administration most hate...
- SpicyLemonZest 1y agoMore than what? Europe trades a tremendous amount with China in the status quo. The argument you mentioned is real, but the EU never subscribed to it in the first place; they've consistently stated (e.g. https://ec.europa.eu/commission/presscorner/detail/en/STATEMENT_23_6409 https://ec.europa.eu/commission/presscorner/detail/en/STATEM...) that trade with China is very important and they have no interest in decoupling, although they'd like to lower the trade deficit.
- notahacker 1y agoWell yes, and so does the US. But Europe has certain significant restrictions on trade with China in sensitive areas, and levies its common external tariff on Chinese imports. China would love those restrictions to be removed and to get a broad trade deal. And other countries that consider themselves broadly aligned with the West have considerably less decision-making inertia than the EU
- SpicyLemonZest 1y agoI don't think China would love to get a broad trade deal. Analysts in both Europe and the US generally agree that the Chinese government cultivates unbalanced trade as a matter of policy. (Indeed, one of the things that's supposed to happen as part of the US-EU "trade deal" is joint action on metals to counteract persistent Chinese overcapacity.)
- vkou 1y agoIt won't work out because the people in charge are the dumbest motherfuckers imaginable. They are utterly convinced that every one of their stupid ideas is brilliant, that they know everything, and that the way forward is to liquidate anyone who has the audacity to say 'no' or 'you're wrong' to them. That's not the roadmap to good management of anything, as literally anyone who has ever worked a job will tell you. How people can see an amalgamation of all the traits they despise in a peer or leader that they actually have to interact with, and go 'oh yeah this guy should be running the entire country, this will end well' is mindblowing. The empire can run on fumes and momentum... for a while. No company or country is so exceptional that it can survive enough mismanagement, eventually you burn through the furniture, and piss away whatever lead or competency you had.
- AnimalMuppet 1y agoI'm not sure they're convinced that every idea is brilliant. They're convinced that they have to convince everyone else that every idea is brilliant, because if they don't, everyone else will wake up and realize that many of their ideas are in fact not all that bright.
- vkou 1y agoI don't think at this point it's safe to say that they are actually playing 3-dimensional chess. There is plenty of evidence that indicates that they are stupid enough to believe their own bullshit.
- wrs 1y agoIt seems like the tariffs are at least one-dimensional chess. The supposed rationale for the numbers was widely ridiculed, but now it’s clear that the numbers didn’t matter as long as they’re large. The tariffs have no rational basis as tariffs, they’re just a convenient stick for extortionate demands like this one.
- A_D_E_P_T 1y ago> I don't see how it can't work at least short term, when the US is by a long margin the world military and economic power. The 90s were ~30 years ago. American economic and military capacity ain't what they used to be, and alienating your allies and friends is starting to look like a poor strategy.
- neves 1y agoUSA spends more in their military than the rest of the world combined. Also the only country which used nuclear weapons of mass destruction. You must fear them.
- alfiedotwtf 1y ago[flagged]
- couscouspie 1y ago> Europe’s trade negotiators will outclass Trump’s B-Team Hardly matters. As long as von-der-Leyen remains head of commission the European Union stays devoted to the US no matter the consensus of commission, parliament, national governments or the people.
- FirmwareBurner 1y ago>Europe’s trade negotiators will outclass Trump’s B-Team Eu has no leverage over the US in such neoglaciations, especially with Russia next door. That's why Ursula folded like a deck chair to Trump otherwise Trump's tariffs would have tanked EU manufacturing sector.
- Tadpole9181 1y agoThe US spends more on everything, those numbers need to be cost adjusted for "cost of a rifle for America v cost of a rifle for China", but never are.
- FirmwareBurner 1y ago>The 90s were ~30 years ago. American economic and military capacity ain't what they used to be You're totally wrong about this when you look at the numbers. EU's economy was on par with the US about 20 years ago. Now it's only half the size of the US.
- duxup 1y agoNo magic that keeps your businesses efficient or running if the government is picking winners and using tariffs. Quite the opposite.
- exasperaited 1y agoIt will not work out over the long run. This is corruption; it breeds corruption, and corruption creates victims. Victims don't put up with it forever and as the old cold case appeal spiel goes, "alliances shift over time". More prosaically, in the short term: TSMC are now effectively compelled to acquire Intel entirely or at least a controlling share, right? Unless Trump's shakedown requires them to own 49% but then bans them from owning more than 50%, which would be the end of the USA as any sort of free market -- and I concede that is possible, because the USA now has a leader who acts more and more like an autocrat -- aren't TSMC essentially compelled by their own interests to find the just-greater-than 1% somewhere? If you're blackmailing me into owning almost all of something but not getting control of what I owned, I think the logical next step is to forcibly gain control, yes? Because it turns the tables. Not least because acquiescing even to buying 49% paints a target on my back. Trump is not saving Intel: he is guaranteeing it is going to get broken up and sold off. He is destroying it. (More to the point he is immediately tying its existence to the success or failure of his own Asia-facing foreign policy, which means he is effectively asserting control over it)
- paganel 1y agoTSMC is not going to get over the 50% threshold because it has no free will in this whole matter, as the very existence of Taiwan, and hence of TSMC, depends on the political will of the US. Otherwise I fully agree with you, this will definitely not work out in the long run, but who cares about the long run anymore in this day and age?
- exasperaited 1y agoBut they have to try, right? Otherwise as you say, they are essentially operating under Rubio and Trump's control as a tool of the State Department. The other important thing about this is that it dirties Intel almost immediately with presidential cheeto dust. So the value is going to fall over the long term, and this isn't the last sell-off they will have to do. Can you stop TSMC or a stalking horse for TSMC buying up parts of the rest? Trump has created a powerful victim here.
- HarHarVeryFunny 1y ago
- ben_w 1y agoThe US margin on economic power isn't all that great, by GDP/PPP it's a long way behind China. Though from the POV of economic coercion, the question is probably more like "what's the USA's import/export market like relative to all my markets including domestic?", which is going to vary wildly by industry. > Ally with China, Iran and Russia to fight the US? Replace Iran with the EU, and yes, some or all of them. > EU as much as they dislike the US, has a laundry list of urgent domestic issues like Russia, Urgent, but affordable. > no cheap energy, no tech industry, Energy isn't meaningfully worse than anyone else, lots of tech but it's mostly local rather than global in scale > ageing population, economic stagnation or even decline, Like everyone else, including the USA > collapsing welfare system News to me. Also: Wasn't the USA's supposed to collapsing since Obama took power? But also, not a unified welfare system over all member nations of the EU. > illegal immigration leading to a rise right wing extremism leading to crackdowns on freedom of speech and censorship. Is it, or is that a narrative? And specifically, is it doing this worse than the USA today?
- neves 1y agoUS is a lot richer than China. GDP/PPP does not count the number of citizens.
- ben_w 1y agoIf per capita was what mattered, the US would be kowtowing to each of Luxembourg, Singapore, and Ireland. The US does not, because "per capita" isn't as important as "per government". The mean wealth/income per person in the USA is indeed higher than China. So what?
- oezi 1y agoWhen all your military spending can't help you win against a third-world country (USA in Afghanistan) or a single country 1/3 your size (Russia in Ukraine), it really makes you wonder if all that spending is justified to uphold one big bluff.
- vaidhy 1y agoWinning is different from taking over.. Russia wants to rule over Ukraine, not destroy it. US was all into destroying Afghanistan and Iraq. They had no intention of being there long term.
- duxup 1y agoI'll nitpick here and say that Russia's plan was more likely to topple the government and put a puppet in place and then leave, but they botched that.
- lostlogin 1y ago> Russia wants to rule over Ukraine, not destroy it. Can’t it be both? It’s hard to argue they aren’t trying to destroy it. It has been attempted in the past during the Holodomor. https://en.m.wikipedia.org/wiki/Holodomor https://en.m.wikipedia.org/wiki/Holodomor
- vkou 1y agoThe context of post-civil war stalinism and food/industrial policy was a little different from modern Russian empire-building. Russia's end goal here is a cultural genocide.
- deleted 1y ago[deleted]
- watwut 1y agoRussia destroys its colonies. It wants to destroy ukraine. And it wants cultural genocide.
- deleted 1y ago[deleted]
- csomar 1y agoThe Soviet Union overspent on military, so much that lots of its military equipment is still present today: https://en.wikipedia.org/wiki/List_of_main_battle_tanks_by_country https://en.wikipedia.org/wiki/List_of_main_battle_tanks_by_c... If anything, it shows the opposite of what you are saying.
- bigyabai 1y ago[flagged]
- Marsymars 1y ago> What can they do now, when the US holds all the cards? Negotiate and follow through in bad faith, because there's no upside to acting in good faith when the opposing party is pursuing a lose-lose agenda.
- fooker 1y agoIt has historically worked pretty well, for several centuries at a time. Are you saying there’s something different this time ?
- duxup 1y agoI don't know what you're thinking of.
- exasperaited 1y agoWell, I am British and have studied a tiny bit of my own country's history... so I do. But consider who in the world really loves the British. You don't need much time to make a list. Or even a paper and pen. The main difference between the British Empire and the American Empire is that the American Empire is being led by a man who believes tariffs are a tax on foreign countries and retail prices can be cut by more than 100% and remain positive.
- ben_w 1y ago> and retail prices can be cut by more than 100% and remain positive. I've missed this story. Can you elaborate?
- nemomarx 1y agoIt's not much of anything - Trump said he would get pharma prices down 500 percent or such.
- exasperaited 1y agoHe said it more than once on more than one occasion though. Which, as with all these things, means either: - this is his wonky understanding (and he is pretty famously innumerate) - he's saying it as a power game despite the pushback because people around him feel they have to smile, agree and retcon stuff to make it believable Or indeed both.
- xyst 1y agoThe economy of "corruption" and "coercion" is Neoliberal Economics 101. Send your regards to pseudo economic theory from the Chicago School of Economics (ie, Milton Friedman); and to Reaganomics/trickle down economics.
- olalonde 1y agoBoth Friedman[0] and Reagan[1] were strongly opposed to tariffs and most forms of government intervention in the economy. Hard to imagine either of them supporting the current administration's policies. [0] https://www.youtube.com/watch?v=zv5SiQpG6sg https://www.youtube.com/watch?v=zv5SiQpG6sg [1] https://www.youtube.com/watch?v=gFMyB8WMuDU https://www.youtube.com/watch?v=gFMyB8WMuDU
- HDThoreaun 1y agoLiterally the opposite of reality. Not sure how it’s possible to get this so backwards
- coreyh14444 1y ago[flagged]
- duxup 1y ago[flagged]
- saalweachter 1y ago... is that not a thing that already happens?
- davidw 1y agoMostly not, because they are all 100% on board. They have shown cabinet meetings where they all take turns effusively praising him in the most sickeningly sycophantic way, though.
- quesera 1y agoWait, are we still talking about North Korea?
- saalweachter 1y agoHe went through a half dozen attorneys general, because they wouldn't do what he wanted, and the thing driving the stock market crazy lately is the persistent rumor he's about to fire the chair of the Fed, whom he appointed.
- deleted 1y ago[deleted]
- neves 1y ago[flagged]
- tremon 1y agoLike he tried to do with Zelensky?
- slt2021 1y ago[flagged]
- sdsd 1y agoThe Roman Empire began with a corrupt Senate murdering Caesar for being a dictator. Based on Rome's history, the surest sign would be for JD Vance to murder Trump, declare democracy saved, and then Trump Jr to become emperor of NATO.
- slt2021 1y agoI have a feeling that Barron will be the one running, when his time comes, not jr
- araes 1y agoThe article pretty much says it right in the opening section > investing a further $400 billion in the US alongside buying a stake in Intel seems improbable from a purely financial standpoint TSMC's entire assets are ~$200,000,000,000 [1] (cash, inventory, accounts receivable, land, buildings and equipment.) Buying 49% of Intel ... maybe. Intel's outstanding Market Cap is current ~$88,600,000,000. (4,377,000,000 outstanding shares [2] @ 20.26 8/5/25 midday price [3]). Double TSMC's entire assets is a bit extreme. Notably, Intel's valuation also seems kind of nonsense. They made $13B in revenue last quarter. 2024 yearly was $53B ... on a market cap of $88B? Intel's been a mess lately, yet their valuation's also kind of a mess. If they ever stop bleeding money on operating profit and net income they won't look that bad. [1] https://en.wikipedia.org/wiki/TSMC https://en.wikipedia.org/wiki/TSMC [2] https://www.nasdaq.com/market-activity/stocks/intc/institutional-holdings https://www.nasdaq.com/market-activity/stocks/intc/instituti... [3] https://www.nasdaq.com/market-activity/stocks/intc https://www.nasdaq.com/market-activity/stocks/intc
- newsclues 1y agoBeen working for a long time just like that though.
- duxup 1y agoThe amount matters a great deal IMO.
- newsclues 1y agoVisibility is the difference. It happened before, and perhaps even worse (more competent people were corrupt). Now, people are just making it public.
- duxup 1y agoThe existence of any corruption really has nothing to do with the amount. The amount matters.
- newsclues 1y agoNot all corruption is visible or known. If suddenly corruption is done in the open, you see it more, and think it may be because the total amount is greater, but it is only more visible. We don't know how much historical corruption was invisible, thus it is hard to accurately say there is more.
- lazyeye 1y agoThis is how China has been operating since forever. They don't seem to be doing too badly.
- duxup 1y agoThis is one of those situations where much like manufacturing jobs in the us ... that's not what I want. I don't think most people want that. I don't think becoming China would be a success.
- rchaud 1y agoWho knew "Running America like a business" had so much in common with the Chinese Communist Party? Banning books, blocking access to websites and apps, protectionist tariffs to support local business and now forcing foreign competitors into joint ventures with failing local companies.
- ModernMech 1y agoThe through line is authoritarianism. Whether it’s Chinese communist authoritarians or American fascist authoritarians, the result is corruption.
- seanmcdirmid 1y agoChina forced 49-51 JVs. But Intel is a public company, not a JV.
- deleted 1y ago[deleted]
- deleted 1y ago[deleted]
- tsol 1y agoAre they? But Silicon Valley is in the USA and not China. I would imagine the legal and business environment has something to do with that.
- Waterluvian 1y agoI’m convinced that this is all what it looks like to live through the end of an empire (or whatever term you’d like). I think our lives are short enough that it can be easy to perceive something like America as “always was, always will be” and the rest is just trivia you learn in history class.
- exasperaited 1y ago> I’m convinced that this is all what it looks like to live through the end of an empire (or whatever term you’d like). It feels to me like it's more like the beginning of an empire, in the sense of existing under an emperor. > I think our lives are short enough that it can be easy to perceive something like America as “always was, always will be” and the rest is just trivia you learn in history class. I think it very interesting that one of the things the USA is going to have to grapple with, in the middle of the most contentious presidency in its history, is the semiquincentennial of independence itself. The bicentennial of independence in 1976 was I think largely an uncontentious thing even though the Vietnam conflict had ended only a couple of years beforehand and the presidency was in the hands of a guy who had taken over the job from, and pardoned, a crook who was forced to resign. Internationally people were pretty kind and generous to the USA. I don't think anyone, anywhere on the planet, is prepared diplomatically for how it will play out this time. Next year is going to be a heck of a year.
- nosignono 1y agoThe US president has been an emperor in all but title for generations at least.
- exasperaited 1y agoI think this will have been news to Biden and especially to Obama, who didn't even get the deference about the new suit.
- nosignono 1y ago
- cyphertruck 1y agoThis isn't corruption or coercion. This is a deal. These are terms being offered. They can say no, or counter. But these terms benefit all parties-- TSMC can eventually buy out intel, get lots of top end fabs, bring their superior processes to those fabs and meet the huge demand in AI chips-- that they currently can't grow fast enough to cover. ASML machines take years to build... a better TSMC process on existing ASML machines in Intel fabs is an easy %30 win for the entire world. Plus, china kept at bay, peace increased, intel's bad management gets to bail out saving face, TSMC gets rewarded for their hard work, Trump gets a win, Intel's employees get better management, and get rich from their stock options winning hugely.... Capitalism is where everyone wins like this. Even china, because china loses if it goes to war, but china feels it has to go to war.