Uncle Sam shouldn't own Intel stock

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-acti...

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.

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.

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.

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.

Taiwan benefits from the US having access to some additional chip manufacturing to support a war effort and reduce the economic cost of intervening. At the end of the day, Taiwan can resist, slow down China, and make them pay an absurdly heavy price for trying to invade, but US participation is needed to break a blockade and end the conflict.

None of this was ever being done because there an expectation that chips were going to be exported to Taiwan in the middle of a conflict.

Yes, like every other security partner, Trump's immature and inconsistence isolationism makes things worse and unstable. But it was hardly the case that intervention would have be 100% assured under any other President, and it's not the case that that its at 0% under Trump. Improving the odds of intervention, slightly, regardless of who is in office, benefits Taiwan.

Moreover, Putin didn't attack US forces when he invaded Ukraine. There is a significant chance that the PRC would launch a Pearl Harbor style attack on the US and Japan at the outset of a campaign against Taiwan. That dramatically increases the odds of the US being involved in the conflict over the long term. Sure, it's also likely (probably more likely) that the PRC might try more limited form of coercion instead, but one ought to be prepare for the range of possible options.

It is worth observing that one of the major reasons why US conservative China hawks give for not wanting to support Ukraine is because it's not a vital US interest, and they want to focus on preparing for war with China and hopefully deterring it.

It is really unclear you should say why that the Ukraine is being treated "poorly", it is being treated how you'd expect an more isolationist administration who thinks it is a strategic distraction would treat it. The current US administration may well be wrong about this--there's definitely a case to be made that further increasing the cost to Putin for aggression increases deterrence in Asia. But the current administration was very clear in the election about how they felt about Ukraine, and they won.

The argument that unless Trump treats Ukraine "not poorly" no one, anywhere, ever, ought to anything to bend the curve to increase the odds the the US intervening on their behalf seems rather sentimental and unpragmatic.

It seems likely that Taiwan leaders have a better grasp than you do of the strategic choices they are making, and that random feelings about how "poorly Ukraine has been treated" don't enter into it.

If you just hate Trump, it would be easier and more direct to say that, rather than seeming to claim that other people in the world are acting irrationally.