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The US Government Is Now a Shareholder in 26 Companies

moeonmargin.substack.com

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Re: The US Government Is Now a Shareholder in 26 Companies

#51

Post by scottfits »

i think an important nuance and the reason we don't suddenly have a sovereign wealth fund is it’s not a centralized US Gov buying stakes. It’s a bunch of different government entities using different pools of capital

- Commerce dept: Intel, IBM quantum, GlobalFoundries, D-Wave, Rigetti, xLight

- Dept of "war": MP Materials for rare earths, L3Harris rocket motors for munitions

- Energy dept: Lithium Americas / Thacker Pass, Westinghouse nuclear

- White House: U.S. Steel golden share

Re: The US Government Is Now a Shareholder in 26 Companies

#53

Post by coffeemug »

alephnerd wrote: post #41
asimpson wrote: post #39

The investments listed here in the article make this seem like an effort to shore up or incentivize industries or companies that are integral to national defense. One example, in the ongoing US-China trade war one of the strongest moves China did was put [export controls on rare earth minerals][1] which are essential components across technology, defense, and healthcare to name a few. The government investing in thes…

Yes. This is called industrial policy, and there is bipartisan support for this. 2008 changed thinking on both sides of the aisle around leveraging state power to build industries. Plenty of us Obama and Biden alums are industrial policy fans, and there is a similar cohort across the aisle.

The issues with this are precedent/slippery slope. Today it's a small stake in a small number of companies, but empirically government initiatives almost always grow. Once entrenched, I would be willing to bet that the government will take larger and larger stakes in a bigger and bigger number of companies until this model becomes a non-trivial, potentially dominant, share of the economy. I can see myself becoming a single-issue voter to oppose that future (although given bipartisan support I'm unlikely to have any options; maybe Rand Paul).

Re: The US Government Is Now a Shareholder in 26 Companies

#56

Post by alephnerd »

scottfits wrote: post #51

i think an important nuance and the reason we don't suddenly have a sovereign wealth fund is it’s not a centralized US Gov buying stakes. It’s a bunch of different government entities using different pools of capital - Commerce dept: Intel, IBM quantum, GlobalFoundries, D-Wave, Rigetti, xLight - Dept of "war": MP Materials for rare earths, L3Harris rocket motors for munitions - Energy dept: Lithium Americas / Thacker…

Excluding the White House, this is the correct approach. Each department and it's associated agencies have better domain experience in specific niches and access to capital.

This doesn't preclude the creation of a generalized SWF, but there is a difference between an SWF, SDF, and everything in-between.

This is the same approach Japan, South Korea, China, and India use as well.

Re: The US Government Is Now a Shareholder in 26 Companies

#58

Post by UncleOxidant »

alephnerd wrote: post #31
cjoelrun wrote: post #19

[flagged]

Repeating outdated tropes ad nauseum is dumb. There is bipartisan support for industrial policy. 2008 shaped our thinking on this and most of our policymakers in the 19th century were influence by Alexander Hamilton and Fredrich List. Our allies (Japan, South Korea) as well as our competitors (China) use this as well, and so did the US until the 1990s. I support the CHIPS Act and IRA. I also support building an Ameri…

> 2008 shaped our thinking on this

I've seen this assertion a few times now in the thread here, can you elaborate? The events of 2008 were kind of extraordinary, so I'm not sure we should shape all of our policy based on that - except in terms of trying to avoid another 2008/Great Recession, but I don't see these actions doing that.

Re: The US Government Is Now a Shareholder in 26 Companies

#59

Post by palmotea »

I am happy with this. There needs to be more democratic control of the economy, as the people who have been running American countries have been consistently making decisions that are against the national interest. There's risk to it, but the status quo is not something to be happy about either.
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