Bernie Sanders backs Trump’s plan to buy stake in Intel

Trump vowed to kill CHIPS Act. Instead, he’s found a way to salvage it.

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[Deleted member 1085004]

Oh for fsck's sake, this again.

A government owning a stake in a company is not communism. It's actually fairly common all over the world. Usually for important infrastructure or other strategically important sectors.

And the defining property communism is not that "the government owns the means of production". It is, in fact, that the workers own them. A co-operative, except it's mandated by ideology.

Not to mention the most complicated civilian logistical operation in US history, the postal service, has been running fine for a long time.

People get too hung up on labels, the fact of the matter is, this is a hybrid government. Not every single thing is privatized (as much as the GOP would like it to be for profit), and having laws, regulations, and operations under the state isn't communism.

There's no single philosophy that is a panacea and we're often tweaking the scales of control between the state, NGOs, and individual liberty. I think the only thing ridiculous is absolutism. And regardless of which model chosen, enough corrupt psychopaths in any governance system with enough power could easily screw them all up.

 

[Strategos777]

For once EVERYONE agrees that socialism is good.

 

[Derecho Imminent]

I suppose this should buff up Intel stock quite a bit. Unless its already baked in.

 

[wildsman]

I still regard this as substantially crony capitalism because it chooses winners and losers. I suppose you could make the case that it's substantially the same as salvaging General Motors in the the Great Recession financial crisis. At least the US divested ownership eventually in that case.

If it were something rarely done as an exception I'd have an easier time of it. Sort of the way Thomas Jefferson saw his role in the Louisiana Purchase as frankly embarrassing because he didn't regard it as within his power to do so. But he made the exception at the time because of course you take that deal.

Jefferson listed three things on his tombstone:

• Author of the Declaration of Independence
• And of the Statute of Virginia for Religious Freedom
• And Father of the University of Virginia

The Purchase is not on there because, frankly, he was embarrassed about it.

Agreed. Intel needs to fail if it isn't capable of keeping up. The state bailing out companies that are 'too important to fail' by buying a stake in them is not a good idea.

I'm all for regulating capitalism but you need regulations that keep the playing field fair - this type of governmental intervention is the antithesis of everything America stands for.

If we are going the way of socialistic countries, that's fine too but we need it across the board - universal healthcare etc. Government picking winners in one instance because the president wants to is not a victory for the people.

 

[mwaid1988]

Oh god, maybe they will take our CPU's now and blow em up and give us vouchers to get new ones from intel at reduced cost, like they did with the cars thing. Bailing out these giant companies is not a good idea. See GM. They still make crap.

 

[TylerH]

I'd reframe the subtitle completely differently: Trump found a way to take credit for something he didn't do.

I'm down with that one, too.

 

[pacocornholio]

People write off Trump on a lot of things and have a visceral reaction to pretty much everything he says because that hole is rotten. In this case I'm agreed - the American people are giving these companies boatloads of money, we might as well get a return. Why is it always socialize the losses but privatize the profits?

A lot of private money has been lost by Intel's investors over the past few years. Meanwhile, local, state and Federal governments have been paid part of the income Intel has paid its employees and contractors.

When Intel succeeds, assuming it doesn't do it by foul means as it has on occasion, the public gains with corporate and personal income taxes, better products, and improved national security.

TLR - There is no need to nationalize companies, even partly, to justify careful, limited public support of private industry.

 

[de.in.sf]

I'm old enough to remember when Republicans railed against any such thing.

 

[One off]

I remember the old days -- a year ago -- when this would be denounced as communism. What's happened to the voices screeching about the Free Market?

Those voices were always expounding thinly veiled justifications for pure self interest, they always pay most attention to which side their bread is buttered.

PS
https://theconversation.com/has-ext...ce-the-1980s-new-analysis-suggests-not-261144

 

[One off]

under CHIPS, money granted had to go to fund capital expenditures. Effectively it had to be used building clean rooms or buying tooling for deployment in the US. Now, the money is going to go for share buybacks and bonuses for Executives and the board.

I don't know the detail, but taking your comment at face value; would providing that money for capex not simply have freed Intel to spend the money that would otherwise have been earmarked for that on share buybacks, etc?

In general, I think I agree with you that in addition to either repayment terms or equity in return for public funds, private companies should be required to spend the public money in specified ways that benefit the public, public equity reduced as reasonable. What it can't be is simply a purchase of shares with no money for actual investment in production.

But what do I know, I'm the sort of ignorant weirdo who thought recapitalising the banks in 2008 could be best done by the government repaying a portion of taxpayer debt such as mortgages and personal loans - boosting cash balances and redeemable value of debts held by banks, plus giving a boost to consumer spending, rather than giving money to the banks via public debt and 'quantative easing' AKA printing money in an inflationary fashion and giving it to the banks.

 

[lurknomore]

I'm old enough to remember when Republicans railed against any such thing.

Can you walk yet, or are you only at the crawling stage?

 

[One off]

A lot of private money has been lost by Intel's investors over the past few years. Meanwhile, local, state and Federal governments have been paid part of the income Intel has paid its employees and contractors.

When Intel succeeds, assuming it doesn't do it by foul means as it has on occasion, the public gains with corporate and personal income taxes, better products, and improved national security.

TLR - There is no need to nationalize companies, even partly, to justify careful, limited public support of private industry.

I'm all too aware of the dangers of removing the profit incentive from industry, but I also think if taxpayers are providing capital to industry (in addition to the rule of law, infrastructure, an educated workforce and a market for products) then they should get a return. As I understand it, no one is forcing Intel to accept government grants and if the reported terms of no voting power are true then the potential downside of political interference is minimised (as much as it can be under your current admin). The question in my mind is if there is actual investment in production in addition to acquiring shares.

 

[lurknomore]

Hey people, ever heard of taxes ?
If a government gives a billion dollars to the right companies to sustain some strategic need, and you don't let them do dividends or buybacks, the government usually ends up collecting over a billion in various taxes as the companies build, buy, expand, and pay their workers.
Getting direct equity isn't necessary, and not getting equity is not a ripoff, as long as the government hasn't abdicated its tax collection duties. Getting equity distorts the market instead.

 

[San Diego Dude]

I got no problem with the US doing some sovereign investing, as long as they're not using it as a reason to push politics and agendas. The problem I see here is that Trump ONLY seems to operate in this headspace of driving his politics and his agendas/vendettas, so why would this be any different?

TLDR: cool idea, but fully expect Trump to find a way to make it awful.

 

[One off]

Watch for other companies to sue over this, which will take years moving through the courts. The CHIPS act was legal because it didn't explicitly choose winners and losers. That's not the case with this little bit of socialism.

Trump with his fascist tendencies would never do it, but imagine a Western world where we all agreed that companies are not people, where we remembered that companies are artificial constructs subject to government licence. Where we remembered that modern limited companies and share exchanges are the product of Victorian England, designed to increase the power of the wealthy.

 

[One off]

Hey people, ever heard of taxes ?
If a government gives a billion dollars to the right companies to sustain some strategic need, and you don't let them do dividends or buybacks, the government usually ends up collecting over a billion in various taxes as the companies build, buy, expand, and pay their workers.
Getting direct equity isn't necessary, and not getting equity is not a ripoff, as long as the government hasn't abdicated its tax collection duties. Getting equity distorts the market instead.

Edit. Deleted unwarranted insult.

 

[One off]

Not to mention the most complicated civilian logistical operation in US history, the postal service, has been running fine for a long time.

Agree with your post, but feel the strangely patriotic need to point out the British Post Office was delivering mail to the front lines during the first world war inside 3 days. In my lifetime, two deliveries through my door per day was normal and I expected a first class letter to reach the other end of the country overnight.


View: https://youtu.be/-EZxJ9Bkoeg?feature=shared
Night mail, one of the fruitful (pun intended) collaborations between two very close friends and shining lights of 20th century British culture. They don't make adverts like this anymore.

 

[One off]

Good information. Too many let generalist labels dictate what models of government they think worked or other countries in the past or present actually run. North Korea is the Democratic Republic of North Korea, same for the Congo. No one considers them a democracy. Labels don't actually correlate what model is being run in reality, and what model is being run doesn't guarantee success. Multitudes of governments and private companies have failed throughout history, its important to be flexible and change the scale when necessary and have the correct people with the correct motivations running them above all else.

Yes. We label ourselves, we label others, we label politicians, we label societies, we label the 'other'. All fly in the face of reality but hey, makes things easier to think about.

 

[One off]

Actually, the equity stakes the British Government took in some of their banks worked out quite well for investors. As an investor, your got a 100-200+ percent gain plus a dividend that carries no foreign income tax and an effective dividend rate of 6.5 - 12+ percent. LYG under $2 and NWG under $4 to name two. That said, still not a fan. Corrupt is gonna Corrupt.

The thing is it was optional, as I understand this to be. Barclays is a major British bank which chose not to accept govenment money, it found other investors (connected to an overseas government) and that was allowed. My concerns are that this initiative may be designed to bail out shareholders rather than protect a strategic asset, that everything Trump does has grift embedded, and that this uncomfortably close to the sort of fascist agenda Trumpy seems to follow.

 

[One off]

Horseshoe theory in play

View attachment 116168

I'd like it better if it was a circle. The authoritarian behaviour of communists and fascists are eerily similar once you parse though the bullshit justifications.

 

[One off]

Would be nice if companies took some personal responsibility. How about shut down your business and sell to the better company? That's real competition. Good ol survival of the fittest. Stop being a welfare queen.

Ahh! The theoretical market as opposed to the hard reality. 1. There is no country in the world which genuinely operates a free market. 2. That is just as well as the free market is both totally amoral (if not immoral) and uncaring about society and the underpinnings of its own existence. 3. Countries and systems of government compete against each other, a balance has to be struck between keeping industry competitive via open competition and the national interest.

 

[One off]

The usual way is to grant a subsidy, then tax the profit, not buy non-voting shares. Apparently collecting the taxes isn't going too well?

The usual way used to be sacrificing someone to encourage the Gods to grant a good harvest.

 

[One off]

If Democrats had implemented this idea, then this statement would make sense to me. But my question to Sanders and everyone else saying this is a good idea is: What in all of Trump's history has ever said he's going to put anything bought "with public good in mind" for public good? He appropriates every bit of funding and largesse he can possibly find. The US people are not going to hold a stake in these companies--Trump will. We will not get any benefits for the return of investment on the CHIPS Act grants to these companies--Trump will.

But now, suddenly, we're forgetting that Trump leeches everything he possibly can just because Sanders unprecedentedly agrees with him?

My prediction: this will benefit us average taxpayers in no way whatsoever. We will still be footing the CHIPS Act investment into these firms and the "kickbacks" being paid for government ownership will go only into Trump's pocket. And then in a year or even just a few months, all the people saying "this actually makes sense!" will be wondering how this ever went wrong.

I take your point, but with a bit of luck Trump is one happy meal away from a stroke. The change in approach will remain.

 

[One off]

Even a broken clock is accurate once a day. Don't get too carried away with the kudos.

This does not need to be applied to subsidies for fossil fuels--just elminate them entirely.
What this could approprately be applied to is Big Phama. They do very little if any basic reasearch, the Feds and partner universities do it and give it away to them. USA Taxpayers get little to nothing of a break or any profit sharing for that, the global market does. Oh, wait, Trump's minions are working stop that already....

What this could approprately be applied to is Big Phama. They do very little if any basic reasearch,

Citation absolutely needed.

 

[One off]

This is key here -- as a society we need to incentivize long term growth rather than short-term stock price manipulation.

The problem is that the foxes are not only in the henhouse, they have the keys.

 

[One off]

This “deal” sounds like it will be Intel issuing new, non-voting, equity in return for the Chips money. The government is not buying existing shares on the open market. As such, it should lower the price for existing shares since presumably the new shares will be entitled to a share of profits.

If it is in return for new investment into the company at a market rate, as opposed to buying the shares from other shareholders, then the value of the company should balance out - existing shareholders get a smaller slice of the cake but the cake is bigger.

 

[One off]

How silly. I immediately thought of Lufthansa giving 20% equity to the German government during the pandemic in return for aid. It was a good deal for Germany, since it was later sold at a profit. Probably there have been countless cases before.

It's tough for governments to remain neutral if they permanently own companies, though. That's probably the biggest downside.

You think the US government is neutral today?

 

[OrvGull]

So... given intels market cap how much will 10b increase the price? Should I be buying INTC... guess I need wallstreetbets

If Intel issues new shares for this, then it might actually decrease the price by diluting existing shares.

 

[OrvGull]

What are the odds that Trump thinks this is a way he can spend billions of dollars of taxpayer money and wind up with him owning 10% of Intel rather than the Govt owning it?

Are we sure he can't?

 

[motales]

Agree with your post, but feel the strangely patriotic need to point out the British Post Office was delivering mail to the front lines during the first world war inside 3 days. In my lifetime, two deliveries through my door per day was normal and I expected a first class letter to reach the other end of the country overnight.


View: https://youtu.be/-EZxJ9Bkoeg?feature=shared
Night mail, one of the fruitful (pun intended) collaborations between two very close friends and shining lights of 20th century British culture. They don't make adverts like this anymore.

Thank you. At last I understand that Alexei sayle video!

 

[RickVS]

Hey, it worked with Chrysler.

 

[Jeff S]

People write off Trump on a lot of things and have a visceral reaction to pretty much everything he says because that hole is rotten. In this case I'm agreed - the American people are giving these companies boatloads of money, we might as well get a return. Why is it always socialize the losses but privatize the profits?

I've got a crazy idea but it just might work: Couldn't we just tax their profits?

I am adamantly upset to government owning stakes in companies, because it creates an Internet conflict of interest in the government between companies the government has invested in, and competitors it had not invested in.

So the same government that has incredible powers of regulation now has one competitor it has more stake in seeing succeed than others.

 

[prh99]

Oh good the MAGA crowd has figured out how to socialism without whining it will turn us into North Korea (Trump is already working on that). Now let's talk about drug companies who have benefited immensely from publicly funded research...small steps.

 

[mattcoz]

Generally, a 10% equity interest in a business does not give a party the right to "run the business". if you want to have full control over a company, you need to own 50%+1 of the voting shares such that you're able to appoint the entire board of directors yourself.

It's not even clear from this plan that the US government will be acquiring voting shares at all. You can acquire an equity interest in a company through non-voting shares and get little to no say in the operation of the business. Holding 10% of the voting shares in a company like Intel will give you a meaningful say in the election of the board and any matters that require shareholder approval, but will not allow you to "run the business" or give you anything like total control or private ownership.

Second paragraph:

the plan would see the US disbursing approved CHIPS Act grants only after acquiring non-voting shares

 

[gosand]

People write off Trump on a lot of things and have a visceral reaction to pretty much everything he says because that hole is rotten. In this case I'm agreed - the American people are giving these companies boatloads of money, we might as well get a return. Why is it always socialize the losses but privatize the profits?

I haven't seen anything that describes exactly how this will benefit the American taxpayers. Maybe I am dense.

The government would hold stake in a company, but that isn't real money. It's equity, and all on paper. I presume for the government to borrow against so we can increase our debt?

I remember the days of working at startups, and I had shares that were worth a couple hundred thousand on paper. Until they did some kind of 300-to-1 reverse split and they were worthless. Not that Intel will likely fold like that company, but it's only theoretical value until the shares are sold.

 

[Thelius]

Please explain to me how government seizing the means of production fits with free market Republicans? Oh right we live in the upside down

 

[Thelius]

Ok, so state directed capitalism? Which party was in charge again?

Both Bernie and Trotsky would approve

 

[jtwrenn]

People really, really, really need to put in a little effort to understand what socialism really is vs what the pejorative use of the term is. Now more than ever.

There are a lot of forms of socialism but government owned production of goods is a major part in it. You could argue his version is more communist for sure, but both have the idea of public/government owned means of production in their ideals generally.

Truth is this is much more of a communist bent on it, but really I think you could easily argue that communism is just fascist socialism. ie socialism for assholes.