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Culture War Roundup for the week of August 18, 2025

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The US government is seeking stakes in Intel, TSMC, and Samsung, among other firms:

Expanding on a plan to receive an equity stake in Intel in exchange for cash grants, a White House official and a person familiar with the situation said Lutnick is exploring how the U.S. can receive equity stakes in exchange for CHIPS Act funding for companies such as Micron, Taiwan Semiconductor Manufacturing Co and Samsung. Much of the funding has not yet been dispersed.

Similarly, a few months ago, the Trump administration approved Nippon Steel's acquisition of US Steel contingent on the USG receiving a golden share that gives it considerable supervisory authority:

The golden share gives the US government veto authority over a raft of corporate decisions, from idling plants to cutting production capacity and moving jobs overseas, as previewed in a weekend social media post by the commerce secretary, Howard Lutnick.

It's an interesting turn for the traditionally market-oriented, small government party to start making a play for the commanding heights of the economy. The Federal government has a long history of giving out subsidies as a matter of policy, but it generally hasn't tried to assert an actual stake in recipient businesses (it will sometimes assume control of failing institutions, but this is generally an emergency measure rather than a long term plan).

  • Does this represent a leftist turn in the Republican Party's view on the state's role in the economy, leaning more towards a nationalist democratic socialism?
  • Are there risks of corruption arising in the Trump administration related to government acquisition of major shares in large companies?
  • Does this represent an expansion of executive authority? What do we expect USG to do with its stakes in these companies?
  • Does this raise potential conflicts of interest, directly aligning the interests of the Federal government with large firms (rather than their merely influential status today)?

Stupid government scope creep is fine when my favorite team does it!

I think if you're pro Trump doing this you also need to consider you're implicitly pro Kamala doing this, do you think that sounds good?

Because in 4-8 years the blue tribe might start doing it too, and this is a silly road to go down.

Does this represent a leftist turn in the Republican Party's view on the state's role in the economy, leaning more towards a nationalist democratic socialism?

It's definitely a move away from New England Finance's control over the party

Are there risks of corruption arising in the Trump administration related to government acquisition of major shares in large companies?

Profoundly, this is a risk for every government in perpetuity

Does this represent an expansion of executive authority? What do we expect USG to do with its stakes in these companies?

Yes, I'm not sure but I have serious doubts as to their ability to make better choices than businesses now. If they could, planned economies would have a way better track record than they do.

Does this raise potential conflicts of interest, directly aligning the interests of the Federal government with large firms (rather than their merely influential status today)?

Yes.

I can kind of think of a Steelman here where government shareholdings in major national champions could enhance corporate governance and specifically help align business and government interests over the long term, but I give this roughly a 0% chance of happening with the current status of western governance institutional skill.

Feels like everyone in the political class finally woke up to China's industrial results and going "oh fuck maybe there was something to be said for this" and are now trying to cargo-cult-government to replicate.

I think if you're pro Trump doing this you also need to consider you're implicitly pro Kamala doing this, do you think that sounds good?

My rules > your rules, fairly > your rules, unfairly.

"My rules" would be no government control of companies. "Your rules, fairly" would be that all political sides get to have the government control companies. "Your rules, unfairly" means that only the left gets to do it.

The answer to this is the same as the answer to a lot of similar things: The left broke the norms so much that the only choices are to do so equally or to do so only for the left. And doing it equally is better. The option of not doing it at all would be the best, but the left has foreclosed that option.

When have the Democrats nationalized a private company?

Consider also that this is simply retarded. It's not Trump or Republicans who will own $INTC, it's the United States Government, and so in 3.5 years it'll likely be handed to "Democrats".

I would not call this nationalizing Intel (etc.)

My rules are also "no government control of companies."

I'm pretty equitable, I think the motivations and intellectual caliber of both the left and right are stupid as fuck. Americans are of course, as with many things, at the cutting edge of this trend.

I find your response quite fascinating. It strikes me that both American parties in a multi-turn prisoners dilemma game where the payoff for "defect" is a temporary gain in political power, which is then offset by the other side doing the same thing, and american governance/institutions/leadership being overall degraded as a result. Both sides are so myopic they seem to only have the capacity to smash the "defect" button over and over again, as American institutions rot, economic and military dominance over the world wanes, and the government gets worse and worse at doing... anything.

And your response to this is "yes! Smash the defect button before they do! Smash it!!!"

I know you don't want to be the first one to cooperate while the other side defects and gets a leg up, but damn, you must all realize this isn't going to end well for your children right?

Smashing the defect button in response to someone who always defects is the correct move.

This statement is wrong in the general case on game theoretic grounds. Not everything is a prisoners dilemma, and not everything your opponent does that you don't like is a game-theory defection. In this case, if you believe that government intervention in the market is bad, then cons are just doing a harm and not disincentivising future similar actions by liberals.

Kind of?

Until you're both way worse off at the end of it all. Although I guess you're both worse off together.

Would much prefer an unwinding of the political cold war and a commitment towards shared prosperity (as that's worked quite well for the last 10,000 years) but that brings us back to "the current crop of western political leaders are myopic morons"

Would much prefer an unwinding of the political cold war

And exactly how are you going to do that?

By forming an orthogonal coalition with other people willing to press the "cooperate" button. "Orthogonal" meaning you cluster around a set of self-consistent values that are split between the current political coalitions. For example, if I had the charisma and moral fortitude, I'd try and pull together a movement that concedes to the left-wing economics of the liberation theology catholics but promotes the right-wing moral culture of the tradcaths. We'd advocate something like an open-borders welfare state, but with brutal enforcement of moral orthodoxy to discourage leeches from coming here. (I'm a morally spineless neoliberal currently, but compromise means being willing to give stuff up.)

Genuinely I have no idea

I'm willing to be the first to cooperate vs defect as I believe in the power of human win/win coordination

But I am a single human with 0 political power

Honestly I'm mildly a doomer about all of this, I just refuse to say "fuck it" and embrace the zero sum game

This implies that the right wing and left wing argument about state control are entirely about morals and not about the effectiveness of capitalism, free markets and a hands-off government.

If "your rules fairly" includes doing things that you think are stupid, inefficient, counter-productive and extra prone to corruption (as the traditional small government conservative would think of governments owning companies) then doing it back would be nonsensical.

It only makes sense in a situation where the main argument to not do something is because of morals or tradition or law, rather than it being bad policy. Why hit our country in the face just because the left hits our country in the face sometimes? You just help to normalize and move the overton window on counterproductive self-face hitting among normies.

You just help to normalize and move the overton window on counterproductive self-face hitting among normies.

Just like you can't get back to the state of "nobody does it", you also can't get back to the state of "it isn't in the Overton window". Either it's acceptable for only the left to do it, or it's acceptable for both sides. You can't move the Overton window to "it's acceptable for nobody".

There are a great many situations where your statement would be obviously untrue. Should cons start getting abortions to own the libs?

If you believe that state ownership of private enterprise is a good thing for the nation then you don't need to talk about "the other side" to begin with, you can justify it off the merits of state ownership.

If you don't believe it's a good thing for the nation, then why would you want the country to harm itself?

Thank you so much for putting this into words better than I could

Because in 4-8 years the blue tribe might start doing it too, and this is a silly road to go down.

Trump doing this doesn't make the Dems more likely to do it. They've already thought of ways to do this on their own (e.g. the government held over 60% of GM as part of Obama's plan in the aftermath of the GFC) anyway. The danger is more that if it appears to succeed (i.e. Intel both does well in the short term and builds more advanced fabs in the US) that a future Republican administration will do more of the same. If, as I think is more likely, it fails (because Intel sucks and this amounts to a further bailout) and future Republicans decide to do more of it anyway, that's mostly on them.

I would posit the GM share ownership was as a result of a huge exigent circumstances, which Intel is not facing.

I also think this makes the Dems more likely to do it, as Trump is moving the Overton window towards doing this whenever you feel like it and towards companies that aren't on the verge of total collapse (although maybe Intel is, lol).

How would you feel if the Dems started buying equity shares in solar panel manufacturers because "the climate is an urgent crisis we must address"?

But overall I am a fan of your comment and mostly agree with you. Thanks for sharing!

I would posit the GM share ownership was as a result of a huge exigent circumstances, which Intel is not facing.

They were already facing it; this is a follow on from their taking of CHIPS Act money. Intel is in trouble; x86-based architectures have lost to ARM at the high end, they don't have a GPU design, and their foundries aren't state-of-the-art. They can either try to build down and compete only in markets which don't want the cutting edge (defense, aerospace, automotive), or build up and try to get themselves out of the hole they are in. They probably are simply too big and have too much debt to do the first without bankruptcy, and it's simply not clear how they can do the second.

How would you feel if the Dems started buying equity shares in solar panel manufacturers because "the climate is an urgent crisis we must address"?

About the same way I felt about Solyndra. My point isn't that this isn't bad, it's that it's not some new sort of badness.

Fair points!

I think if you're pro Trump doing this you also need to consider you're implicitly pro Kamala doing this, do you think that sounds good?

That would sound scary, if I didn't see the entire tech and financial sector coordinate to cut off dissident companies way before any of this was ever talked about. If stuff like this is going to happen anyway, I prefer state control to be made explicit, so you know which companies are allied or compromised, depending on the administration.

Every wartime economy is planned economy. Make what you want out of it.

They're not - the sort of total, top-down mobilization of the economy that characterized the World Wars is fairly unusual. But leaving that aside, these economic arrangements were not intended to be welfare improving for the people living in them.

IMO these companies would benefit from having shareholders with very long-term focused horizons like governments.

It's not too unusual in Europe for strategic companies like Airbus and VW to have this.

This seems backwards. By their nature, private businesses tend to be focused on the long-term, since their value is equal to the net present value of all future cashflows from now until the end of time, whereas governments tend to focused on the short-term, since they just want to win the next election.

private businesses tend to be focused on the long-term

Private businesses aren't focused on anything, since they don't have minds. The people who make decisions on their behalf are quite often focused on the short-term. As a chief executive, I may be able to sell shareholders on a long-term plan, but often as not they're looking for a good quarterly report and I'm looking to keep my job and score a bonus.

Well, the shareholders care about the market's assessment of the long-term profitability of the company, and the shareholders elect the board of directors, so the company has a much stronger incentive to care about the long term than the government does. For the government to care about the king term, the voters need to be able to assess their performance and vote in that basis, and they just don't.

their value is equal to the net present value of all future cashflows from now until the end of time,

Totally false. The vale of an equity is simply an estimate of the future value of itself, ad infinitum. A perfectly rational trader will be perfectly happy to buy a stock if he thinks it will go up, even if the stock costs more than the expected sum of all future dividends and distributions.

The value of the company's assets, dividends, buybacks, hostile takeovers, etc prevent the company's value from reaching totally arbitrary values, but none of those can be plugged in to a formula to determine the current equity value of a company.

The entire value of the company comes from the money it eventually pays out to its shareholders.

By their nature, private businesses shouldbe focused on the long term if you consider a purely theoretical universe populated by homo economicus.

Private companies in the real world, headed by real humans, only rarely tend to be concerned with the long term.

No, I think that in practice, private companies are much more focused on the long term than governments because they have very strong incentives to be. Most real humans aren't paid millions of dollars to run large companies after going through an extensive filtering process disciplined by markets. Most companies don't even survive more than a few years. The market selects for companies that are unusually well-run and mostly only allows them to survive, at least in competitive industries. It's not perfect process but I think it works much better than politics.

Modern economic theory is founded on the premise of the rational actor. My economic theory is founded on the premise of the retarded actor.

That's why it's an actor, they're only pretending to be retarded. They're also method actors.

They went full retard. Never go full retard.

with very long-term focused horizons like governments.

Is 4 years really that long?

4 years > 1 quarter

It's not too unusual in Europe for strategic companies like Airbus and VW to have this.

And Germans are poorer than Mississippians.

The problem is that States are also extremely risk averse, and therefore terrible as shareholders in anything that requires flexibility and innovation.

Semiconductors are hard in part because you need levels of investment similar to large civil projects and that flexibility to be successful.

However USG is uniquely good at throwing money at zany things for long term strategic gains as States go, so maybe it will work out .

If in the future politicians start telling you we need to use the dividends of this ownership for social programs, that's your signal that Intel will become irrelevant.

Obviously the dividends are going to get plowed into social security if intel ever makes a profit.

Well then you'll get the same outcome as French Dirigisme: a very nice infrastructure and industrial base slowly rotting under the weight of uncertainty as all your competitors catch up and loot it until it can no longer support its own weight.

receive an equity stake in Intel in exchange for cash grants

How does this differ from just buying shares?

These grants have strings attached, including but not limited to: national security requirements, clawback provisions, profit sharing clauses, etc.

Intel can't use this money to go build a bunch of factories in China, which would kind of defeat the point of the CHIPS act.

This is just restructuring the deal over that money that the US desperately wants to give companies like Intel, but only insofar as it unwinds it's dependence on Taiwan and China.

I'm surprised and pleased by how philosophically coherent this move is. If the government is going to give out industrial subsidies, why not get something in return? We all know the big corporations will dodge any tax we throw at them, but trying to get around paying dividends risks pissing off their own power base.

That being said, I'm very bearish on the chances of this particular administration doing anything productive and socially useful with additional industrial control. Probably it just goes toward enriching the Trump empire with corruption.

why not get something in return?

The question is how much return. Do we trust the government to be a great asset manager? Why not just have governments dump money into PE funds if you're trying to IRR-maxx?

Do we think government agencies/employees are better capital allocators than the current cohort of capitalists and Wall St et. al?

The thing is, regardless of whether the government buys specifically stocks, the government will allocate capital anyways. Currently that goes toward treasuries and direct subsidies. The government buying stocks instead is pretty much a direct improvement.

Why is that an improvement? This seems like a terrible way to allocate capital.

Subisides are just a strict loss of monies, and treasuries have abysmal interest rates. The superior growth rate of stocks makes them a means to raise government revenue without raising taxes.

Subsidies don't have to lose money if they have a positive multiplier.

I'm not entirely sure what treasury ownership you're referring to? Social security?

Because in that case, that's the government owning a Treasury issued by the government. The interest paid is real it's paid by the way everything else is, taxes or debt.

I fully agree social security is a shitshow nightmare from numerous perspectives. I think they should move to the "Canadian model" a la CPP, where investments are managed by an extremely competent and largely independent team.

I would like to reiterate that the executive branch borderline randomly scooping up equity stakes in flavor of the month companies is not this. Also, it's likely a transfer of welfare from taxpayers to equity holders AND it will definitely fuck heavily with equity price discovery, leading to a less efficient market overall.

Subsidies don't have to lose money if they have a positive multiplier.

They do if the government can't effectively recoup their investment via tax revenue-- which is what happens when money goes to tax-avoiding corporations.

Because in that case, that's the government owning a Treasury issued by the government.

Yes, that's the problem. Treasuries are essentially just an investment in the government's future ability to raise revenue, but that comes with the obvious moral hazard that when growth fails to cover the interest, "raise revenue" ends up becoming "raise taxes". I do agree with you on the "managed investments" bit-- and also the competent, professional team bit. With reference to...

I would like to reiterate that the executive branch borderline randomly scooping up equity stakes in flavor of the month companies is not this.

You won't find me arguing in favor of the implementation. Trump is definitely not the president I trust to do this. But the fact of the matter is, the government helicopters loads of money into flavor-of-the-month causes literally all the time, regardless of party or president. So why not set the standard that the government will get equity in return? And with reference to price discovery-- the government committing money into a sector is a truthful signal that the government is interested in promoting it, and that the government will become self-interested in making favorable regulations toward it. Obviously there are moral hazards associated, but price discovery, of all things, is not going to suffer.

All excellent points!

If the government is going to give out industrial subsidies, why not get something in return?

In the case of US Steel, the government didn't give out subsidies, it simply demanded a payoff for approving the deal.

More generally, it's not philosophically coherent. If the USG expected to get a stake in exchange for subsidies, the most of the South and Midwest would be government property. The general pattern the US has followed is that it may offer subsidies or very favorable lending terms (which amount to subsidies) for things the government wants to promote, but hasn't insisted on receiving partial ownership. Partly this because Americans (and especially Republicans) have traditionally been averse to state ownership, but also partly because subsidies are not generally conceived of as business investments but the state paying you to do something it wants. The CHIPS Act was not the USG dipping its toes in the market to make a little money, it was promoting the development of domestic chip production.

If they're getting something in return, then it's not a subsidy.

Well, State-Owned Enterprises are a feature of one notorious, nominally Communist state that the US is dedicated to beating, and this does look like a market-flavored convergent evolution in this direction, but no, I don't think it's theoretically leftist. It is of course statist and industrial-policy-pilled. Probably prudent; will allow the state to strongarm Intel into restructuring by TSMC executives, which seems to be the plan to save the beleaguered corporation.

Are there risks of corruption arising in the Trump administration

Oh yes.

For what it is worth, the government taking direct control of key industries is not a leftist-only thing. Historically, fascists were also big on dirigism. If the Fuehrer wanted German car manufacturers to build tanks, he will tell them to focus on building tanks, and they will comply, or else.

From what I can tell, Intel foundries are basically in the third place after TSMC and Samsung for 3nm processes. Also, it seems that the foundries -- the only part of any strategic importance -- are perhaps 10% of their business.

Personally, however little I trust CEOs to be aligned to the long term interests of their companies, I trust the USG a lot less. I can totally see Trump wanting the ability to fire CEOs when they report weak quarterlies for making him look bad, I just don't think that this is going to make companies more competitive or serve urgent national security needs.

"the Government taking a direct share in owning companies isn't a state-owned enterprise, it's simply market-flavored convergent evolution (??????)"

The government owning common shares in a company makes it (partially) state-owned, the state has a share of ownership. No amount of word games will change this underlying fact.

If it walks like a duck, and quacks like a duck, the duck owning shares in something has an amount of ownership proportional to the % of shares owned (moderated by shareholders agreements).

It is of course statist and industrial-policy-pilled.

Dirigism. It's called dirigisme. Just tell Trump it's French if you oppose it.

Dirigism with retarded characteristics.

[ With sincere apologies to Deng Xiaoping ]

Similar industrial policies (with some degree of squinting) seem pretty common: Japan and Korea have their quasi-government conglomerates with strong political ties. The Nordics have state-owned enterprises. Norway also holds lots of shares in its wealth fund. Airbus is partially held by several European governments.

That said, I intentionally don't (didn't?) own INTC because it really needs some leadership and strategy changes to remain competitive.

The right has begun to sour on Capitalism for a few reasons. The current iteration of the “free market” has so much government intervention that it’s basically corporate socialism already, making calls to preserve the free market ring hollow. Libertarians burned too much of their conservative cachet and are now a fringe group without much pull. Also the right realized that “all that is solid melts into air” includes religion, nation states, ethnic groups, gender roles and families.

I wouldn't underrate the effects of woke capitalism on shifting conservative attitudes among the rank and file. CRT and pride are very very unpopular with the republican base.

I would also point out that the current crop of senior republicans mostly realize that getting unions to defect from the democrats is a serious blow against their enemies rebuilding a winning coalition, and unions are likely to see this as Trump getting more ammunition to force a mutually acceptable deal.

The worst part of these deals is the bailout CHIPS Act which already happened. It appears that while the Intel stake (which is quite large, 9.9% of the company) is technically common stock, the government isn't allowed to vote it independently.

"The government also agrees to vote with the Company’s Board of Directors on matters requiring shareholder approval, with limited exceptions."

Since it looks like there were strings attached to the CHIPS Act funding which are being dropped, this could be anything from an effective takeover to a mere minor technical restructuring; someone would need to dig deeper into it to find out.

As for the questions:

Does this represent a leftist turn in the Republican Party's view on the state's role in the economy, leaning more towards a nationalist democratic socialism?

No, I don't think so. It's a turn towards industrial policy (so collectivist), but not in the Western leftist tradition. I think Trump is probably taking his cue from Japan and South Korea here. The idea seems to be to make money, not improve the lot of the workers or anything like that.

Are there risks of corruption arising in the Trump administration related to government acquisition of major shares in large companies?

There's always risks of corruption, but this doesn't seem any worse than other things the government does.

Does this represent an expansion of executive authority? What do we expect USG to do with its stakes in these companies?

Does this raise potential conflicts of interest, directly aligning the interests of the Federal government with large firms (rather than their merely influential status today)?

These are the big problems, especially the last. Although I'm far more worried about the other direction, increased political control of the large firms using the government's power as a stakeholder (which may be less limited than the government's more direct political powers). The government acting in ways which helps American companies isn't necessarily bad. Acting in ways that helps Intel and other large firms over smaller competitors is bad, though not particularly novel. But the threat of the government setting Intel's corporate priorities while protecting Intel from competition... it seems we have a microchip shortage, comrade!

The idea seems to be to make money

Why not buy units in private equity funds then? Much better returns than Intel lmao

Furthermore, if that is the goal, why do we think government bureaucrats and elected officials are better capital allocators than Wall St et. al? Are we pretending government employees are hyper competent now?

Are we pretending government employees are hyper competent now?

Trump obviously thinks HE is.

Why not buy units in private equity funds then? Much better returns than Intel lmao

Not to speak for The_Nybbler, but I think the intent is to both exercise control and make money. You could conceive of a similar bailout not concerned with making money off the deal that's solely about protecting jobs / paying off unions / encouraging local investment even if it turns out net negative.

Buying into private equity funds would simply result in the government getting better returns while the investment goes to foreign countries / companies if that's the most efficient way to get returns. Buying directly into a company like this with these restrictions is certainly a market distortion but the idea is that it should still be financially net positive, just less so than in the most economically efficient world possible, and help support (their idea of) national interests.

Thank goodness the government is finally diversifying its investment holdings. Do you know that most of our money is in low yield Treasury bonds? It's no wonder USG is nearly bankrupt. As a stakeholder myself I'm a big fan of this move, though I would still prefer a more balanced portfolio.

Treasuries are a liability of the government, not an asset.

What am I missing?

The government has various parts, including the "Social Security Trust Fund", which hold its own liabilities.

Libertarianism as the only right wing ideology is a flawed view of the left/right spectrum. Most right wing governments have historically been involved in the economy and securing essential resources for the nation. Mercantilism, fascism, monarchy etc are completely compatible with a nationalistic economic policy. If anything the liberal factions have often been aligned with leftist groups against nationalists and traditionalists.

Does this represent a leftist turn in the Republican Party's view on the state's role in the economy, leaning more towards a nationalist democratic socialism?

I mean, Trump representing a turn from free markets was something talked about since his first term. If I remember correctly all the Blues were mocking the very idea, even endorsing Rainbow Capitalism, starting with Clinton's "will breaking banks up stop sexism?".

Hillary's comment was aimed at Bernie, not Trump, though.

I don't think that matters much, it still marked a change in Dem rhetoric. Even Bernie himself had to adapt to be more appealing to the rainbow coalition.