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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

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-action-debt-vs-equity-for-bailouts/ https://chicagopolicyreview.org/2022/08/23/piece-of-the-acti...

pton_xd 1y ago
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.
AnimalMuppet 1y ago
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.
- fooker 1y ago
  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.
  - SebFender 1y ago
    Well said and on point.
- 627467 1y ago
  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.
  - wredcoll 1y ago
    I dunno if you lived through 2008, but the government actions at the time were pretty big news.
  - bdangubic 1y ago
    When United States is becoming Venezuela like nationalizing shit it is major news :)
    - nine_k 1y ago
      Not nationalizing as in confiscating, but bailing out, like it's 2008. A 10% stake is not even that big. Major news nevertheless.
- Panzer04 1y ago
  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.
  - jabl 1y ago
    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.
    - Panzer04 1y ago
      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.
      - jabl 1y ago
        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.
Fricken 1y ago
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 https://en.wikipedia.org/wiki/Canada_Development_Corporation
- rimbo789 1y ago
  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.
- thijson 1y ago
  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 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.
JKCalhoun 1y ago
What happened to Intel? Did they need a bailout?
- wmf 1y ago
  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.
  - melling 1y ago
    TSMC is now a monopoly with over 500 customers. It’s more than a money problem
    - Hikikomori 1y ago
      Intel really never had big external customers and the ones that tried also failed, like LG.
      - melling 1y ago
        Yes, but without external customers to pay for the newer advanced fabs, Intel can no longer afford to invest in fabs.
        Hikikomori 1y ago
        Agreed. Their problem is both, struggles with new EUV fab and don't have the org capable of working with customers.
    - iszomer 1y ago
      Not an American monopoly though.
      - melling 1y ago
        ASML is also a monopoly that’s not American. You must be missing something.
godelski 1y ago
> 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.
- entropi 1y ago
  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.
  - godelski 1y ago
    > a few billion bucks ... I would also spend it, 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] [0] https://www.youtube.com/watch?v=BknZGQoCFt4 https://www.youtube.com/watch?v=BknZGQoCFt4
themafia 1y ago
> 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 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.
- stogot 1y ago
  Could it be that Chicago school thinking has worked but greed & profiteering elsewhere have stolen benefits from the citizens?
  - themafia 1y ago
    Were those vulnerabilities particularly obscure or might they have been obvious from the outset?
  - bryanrasmussen 1y ago
    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.
  - fredrikholm 1y ago
    > 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.
esyir 1y ago
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.
khuey 1y ago
> 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.
melling 1y ago
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.
JumpCrisscross 1y ago
> Didn't we already cross this particular Rubicon during the auto bailout a decade ago? We nationalised passenger rail in the 60s.
freeopinion 1y ago
> 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.
- mcny 1y ago
  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.
  - marbro 1y ago
    [dead]
thisisit 1y ago
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.
- hopelite 1y ago
  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.
  - klooney 1y ago
    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.
    - Larrikin 1y ago
      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.
the_gipsy 1y ago
Communism with extra steps
- hopelite 1y ago
  More like a different form of what is called communism in one of its forms
sennalen 1y ago
This isn't a bailout, though. It's strong-arming.
- bmelton 1y ago
  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
alfalfasprout 1y ago
Indeed, the US has a long and storied history of privatizing riches and socializing losses.
m463 1y ago
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)

pton_xd 1y ago

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.

AnimalMuppet 1y ago

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.

fooker 1y ago
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.
- SebFender 1y ago
  Well said and on point.
627467 1y ago
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.
- wredcoll 1y ago
  I dunno if you lived through 2008, but the government actions at the time were pretty big news.
- bdangubic 1y ago
  When United States is becoming Venezuela like nationalizing shit it is major news :)
  - nine_k 1y ago
    Not nationalizing as in confiscating, but bailing out, like it's 2008. A 10% stake is not even that big. Major news nevertheless.
Panzer04 1y ago
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.
- jabl 1y ago
  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.
  - Panzer04 1y ago
    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.
    - jabl 1y ago
      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.

Fricken 1y ago

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 https://en.wikipedia.org/wiki/Canada_Development_Corporation

rimbo789 1y ago
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.
thijson 1y ago
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 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.

JKCalhoun 1y ago

What happened to Intel? Did they need a bailout?

wmf 1y ago
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.
- melling 1y ago
  TSMC is now a monopoly with over 500 customers. It’s more than a money problem
  - Hikikomori 1y ago
    Intel really never had big external customers and the ones that tried also failed, like LG.
    - melling 1y ago
      Yes, but without external customers to pay for the newer advanced fabs, Intel can no longer afford to invest in fabs.
      - Hikikomori 1y ago
        Agreed. Their problem is both, struggles with new EUV fab and don't have the org capable of working with customers.
  - iszomer 1y ago
    Not an American monopoly though.
    - melling 1y ago
      ASML is also a monopoly that’s not American. You must be missing something.

godelski 1y ago

> 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.

entropi 1y ago
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.
- godelski 1y ago
  > a few billion bucks ... I would also spend it, 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] [0] https://www.youtube.com/watch?v=BknZGQoCFt4 https://www.youtube.com/watch?v=BknZGQoCFt4

themafia 1y ago

> 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 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.

stogot 1y ago
Could it be that Chicago school thinking has worked but greed & profiteering elsewhere have stolen benefits from the citizens?
- themafia 1y ago
  Were those vulnerabilities particularly obscure or might they have been obvious from the outset?
- bryanrasmussen 1y ago
  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.
- fredrikholm 1y ago
  > 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.

esyir 1y ago

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.

khuey 1y ago

> 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.

melling 1y ago

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.

JumpCrisscross 1y ago

> Didn't we already cross this particular Rubicon during the auto bailout a decade ago? We nationalised passenger rail in the 60s.

freeopinion 1y ago

> 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.

mcny 1y ago
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.
- marbro 1y ago
  [dead]

thisisit 1y ago

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.

hopelite 1y ago
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.
- klooney 1y ago
  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.
  - Larrikin 1y ago
    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.

the_gipsy 1y ago

Communism with extra steps

hopelite 1y ago
More like a different form of what is called communism in one of its forms

sennalen 1y ago

This isn't a bailout, though. It's strong-arming.

bmelton 1y ago
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

alfalfasprout 1y ago

Indeed, the US has a long and storied history of privatizing riches and socializing losses.

m463 1y ago

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)