If you’re going to give taxpayer money to a for-profit company, taxpayers should receive a share of the company in return. I generally don’t like 90% of the policies we’ve got going on right now, but I actually feel okay about this one.
> taxpayers should receive a share of the company in return
This is seductive logic but I think the opposite is true. The only time government should be giving money to a for-profit company is where a dividend in value is available that is not related to having a stake in the company.
Think about it this way: if the value transferred is fully realised as shares in the company then the government actually transferred nothing to the company. It was a pure commercial transaction and there is no obligation on the company to do anything different than it would have done commercially otherwise. Except the outcome is that the government is now entangled in private industry which is generally bad because it creates strong conflicts of interest in terms of policy and regulatory powers wielded by the government. All the dividend to taxpayers comes from the part that is not realised commercially.
Doesn't this create an incentive for the US Gov't to boost Intel and harm their competitors? That seems not great to me from a competition & healthy markets standpoint.
In the rare conditions where this has been necessary in the past, US companies have been given clear terms for regaining control of those shares. I'm not seeing any buyback provisions.
This is ignoring the original agreement of profit-sharing with the government as was in Biden’s original plan. Feeling “okay” or not “okay” is irrelevant until we know how well Intel does in the next decade and calculate the cost against the profit sharing agreement.
Yeah, I haven’t dug into the numbers to know. Which option makes more money for the government (and therefore the taxpayer, sort of) - a profit sharing agreement, or a share of the company (which, as with all publicly traded companies, is a profit sharing agreement that sometimes happens through dividends, and sometimes happens through stock sales).
If you’re going to give taxpayer money to a for-profit company, taxpayers should receive a share of the company in return. I generally don’t like 90% of the policies we’ve got going on right now, but I actually feel okay about this one.
> taxpayers should receive a share of the company in return
This is seductive logic but I think the opposite is true. The only time government should be giving money to a for-profit company is where a dividend in value is available that is not related to having a stake in the company.
Think about it this way: if the value transferred is fully realised as shares in the company then the government actually transferred nothing to the company. It was a pure commercial transaction and there is no obligation on the company to do anything different than it would have done commercially otherwise. Except the outcome is that the government is now entangled in private industry which is generally bad because it creates strong conflicts of interest in terms of policy and regulatory powers wielded by the government. All the dividend to taxpayers comes from the part that is not realised commercially.
Doesn't this create an incentive for the US Gov't to boost Intel and harm their competitors? That seems not great to me from a competition & healthy markets standpoint.
The problem is more severe. Previously the US government was passing laws (such as the CHIPS act) and then enforcing/executing them.
Now it is just doing whatever it wants.
This is only good for a very small sub-set of people, everyone else is worse off.
What competitors?
In the rare conditions where this has been necessary in the past, US companies have been given clear terms for regaining control of those shares. I'm not seeing any buyback provisions.
This is ignoring the original agreement of profit-sharing with the government as was in Biden’s original plan. Feeling “okay” or not “okay” is irrelevant until we know how well Intel does in the next decade and calculate the cost against the profit sharing agreement.
Yeah, I haven’t dug into the numbers to know. Which option makes more money for the government (and therefore the taxpayer, sort of) - a profit sharing agreement, or a share of the company (which, as with all publicly traded companies, is a profit sharing agreement that sometimes happens through dividends, and sometimes happens through stock sales).
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