Seems like it'd be a lot cheaper to work with china rather than pretend like they're going to attack us.

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.

it is not the same thing :)

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.

Investment is about voting/control, not just money.

From a purely financial perspective, federal taxation on companies would be similar to owning shares (except ≈preferential since the government usually gets paid first).

From a voting and control perspective, we usually don't want the government getting involved (the government should be using industry regulations, and avoiding trying to pick winners).

In New Zealand our government screws up everything it has an ownership stake in (notably electricity and rail).

You should look into In-Q-Tel.

> I guess preferential treatment could be the only issue?

I'm not sure it's the only issue, but for now focusing only on this issue: it's a really big issue. The R's often complained about Dems choosing winners and losers (IIRC related to the solar industry). This is now way beyond what the Dems were trying to do by advancing solar. The gov can use it's buying power to sway things towards Intel, for example, over AMD. Huge potential for conflict of interest that will distort the markets.

The other tangential issue is that in some cases these can look like bribes. For example, OpenAI "offering" 5% of their stock to the gov.

It creates a lot of perverse incentives, and is probably a bad idea in the long run. If the govt makes more money when intel is successful, then the govt is incentivized to sabotage Intel's competitors (e.g. through tariffs, export controls, and many other powers). This distorts the free market that is (allegedly) at the center of America's success

No, not enough money in it.

Tax the rich.

> Corporate taxes don't work

What does this mean?

How about "National Socialism"? Perhaps there's a historical precedent?

Communism with American Characteristics

There’s a word for such a political system, it starts with an ‘f.’ Expressing opposition to it in the context of current events gets you prosecutorial enhancements.

Been like this since the GFC: the rich have a government funded undo button they can press whoever they need to.

It's been the status quo for a while now - https://www.pbs.org/newshour/economy/trillions-of-dollars-in...

The term "fascism" has undergone so much memetic drift that it verges on useless, but this does bear a striking resemblance to fascist corporatism [1], at least taken to the logical conclusion:

"A fascist corporation can be defined as a government-directed confederation of employers and employees unions, with the aim of overseeing production in a comprehensive manner. Theoretically, each corporation within this structure assumes the responsibility of advocating for the interests of its respective profession, particularly through the negotiation of labor agreements and similar measures."

A lot of dystopian literature has been written with the premise that governments would wither away and end up replaced by mega-corporations that become the de facto law. I suppose the theory where the government just buys all the corporations instead because they control the money supply was generally overlooked by those authors. The end result probably isn't much different, but the path to get there has some differences, I suppose. It also seems reasonable to say that the authors, not being from the finance world (at least that I know of) may not have realized the depths to which financial engineering would sink and the willingness of the governments to participate in it.

Back in the 1980s when cyberpunk was really thriving the government at least made mouth noises about fighting the worst excesses of financial engineering. Whether history bears that out as something they were actually doing, the reader is welcome to come to their own conclusions about. But the government at least tried to look like a countervailing force to financial engineering.

Pretty much.

For all the current US administration has complained about the opposition being “socialist,” they’ve certainly gone all-in on the state partially owning private companies.

Almost like cries of “socialism” have become a dog whistle instead of what the term actually means.

Closer to fascism, socialism implies the workers own the means of production to an extent

Norway is far ahead in this, they collect lots of tax from poor and avg. people yet they have the biggest wealth fund in the world. literally only benefits certain groups

There's a reason they call him JDPON DON!

Mao Thedon?

Next step would be to do what europe does and put the unions on the boards and move towards social.

That or just go full fascism. Who knows!@

It is when capitalists own the means of production.

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 American SWF as well as operationalizing state-managed SWFs and pension funds into SDFs as well. And so do most decisionmakers who were in the Obama and Biden admins as well as the Trump admin.

Edit: can't reply

> so I'm not sure we should shape all of our policy

What I mean is pre-2008 it was heterodox to assume that government capital could be deployed to build or rebuild industries.

The default assumption was industrial policy only succeeded once (Japan).

The mixture of public-private subsidizes at the state level to develop GreenTech clusters in TX and CA, Semiconductor clusters in AZ, NatGas and Oil production in the Dakotas, and other such "booms" in the 2010s compared to Germany's hard stance on austerity leading to deindustrialization and China catching up to Germany in a number of core industrial technologies influenced the newish generation of policymakers.

> For this specific industrial policy

Yes [0][1][2][3].

[0] - https://www.bloomberg.com/news/articles/2024-09-06/biden-aid...

[1] - https://www.nytimes.com/2024/09/10/us/politics/us-sovereign-...

[2] - https://www.yalejournal.org/publications/wealth-and-diplomac...

[3] - https://irs.princeton.edu/industrial-policy-united-states

It’s “100% socialism” in your definition and 20% in someone else’s. Its pretty tiring constantly debating these words.

Socialism is the workers owning the means of production. There is nothing here where workers own it except only incidentally via employers issuing stock options and RSUs.

Yes, we've been copying the Chinese in a few cases in the past 6 years. I think they're the early warning signs of cultural dominance. Sort of like how a tin-pot African dictator in the 1980s would have an over-the-top western-style military uniform.

The modern equivalent of an ad hominem attack. Do better.

VEB = Public Owner Enterprise of former East Germany https://en.wikipedia.org/wiki/Volkseigener_Betrieb

What capital gains? The governments balance sheet doesn't matter...

Think of it like the original Bitcoin wallet, its value is $0 because none of those will ever be sold.

If dividends are involved it could matter but the government basically gets 20% of dividends already and extra 4% doesn't make a huge difference.

Returning to blocking stock buybacks as price manipulation and forcing businesses to give out dividends again would actually impact revenue in a meaningful way in contrast.

The government would need to sell their position in order to have gains.

> There needs to be more democratic control of the economy…

And you think this is that? Oh dear.

> the people who have been running American countries have been consistently making decisions that are against the national interest

Freudian slip?