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Better to for government not Invest in TSM or Intel

Arthur Hanson

Well-known member
It would be far better and make more business sense to invest in TSM's US operations than Intel. In everything from operations to research to profits, TSM has a clear . and substantial lead. I'm against so called government "Investments" which mainly benefit special interests and have a very, very poor record of return. Investments should be strickly left to the private sector of which the US has the best of any major country. If anything, invest in education and let the students decide where they want to work. Look at the results Elon Musk has achieved at a small fraction of the cost, time and resources of NASA. Efficient use of capital is key to individuals, companies and countries and even achieving peace and progress that benefits everyone. Actually the role of govenment should be to create a fair, efficient and transparent market that will benefit everyone and not a few special interests. Our government has a terrible record in many of the actions it classifies as so called "Investments".
 
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Except Elon Musk is funded almost entirely by the gov't, either through green energy tax credits (Tesla/Solarcity) or privatization of NASA (SpaceX). Bezos is following the same arc with Blue Origin, which is obviously just a front for making Elysium a reality. Estimates on the historical ROI of NASA range from 700% to 4000%, so surely these policies have little to do with improving innovation in that marketplace.

COVID and the Fed's response in the form of QE has cost America more than all of its wars (on paper) combined and adjusted for today's dollars, that is well north of $10T. From that pie, over $2T has gone to 745 billionaires in America. And yet Congress cannot bring themselves to fund Biden's half assed $800B "Build Back Better" plan, and it seems that the $50B CHIPS Act is destined for a similar fate. Take a look at China's high speed rail network in 2008 vs 2020, that's an infrastructure investment that is otherwise impossible without central planning and we're just starting to see the fruits of that labor. We have much worse problems in America than dimwitted bureaucrats.

Also my house cat has a fierce sense of independence without any appreciation or understanding of the surrounding structures that enable his luxurious day to day existence. He'd fit right in with these oligarchical clowns we're told to worship, only he is a good boy except for when he eats my plants.
 
Except Elon Musk is funded almost entirely by the gov't, either through green energy tax credits (Tesla/Solarcity) or privatization of NASA (SpaceX). Bezos is following the same arc with Blue Origin, which is obviously just a front for making Elysium a reality. Estimates on the historical ROI of NASA range from 700% to 4000%, so surely these policies have little to do with improving innovation in that marketplace.

COVID and the Fed's response in the form of QE has cost America more than all of its wars (on paper) combined and adjusted for today's dollars, that is well north of $10T. From that pie, over $2T has gone to 745 billionaires in America. And yet Congress cannot bring themselves to fund Biden's half assed $800B "Build Back Better" plan, and it seems that the $50B CHIPS Act is destined for a similar fate. Take a look at China's high speed rail network in 2008 vs 2020, that's an infrastructure investment that is otherwise impossible without central planning and we're just starting to see the fruits of that labor. We have much worse problems in America than dimwitted bureaucrats.

Also my house cat has a fierce sense of independence without any appreciation or understanding of the surrounding structures that enable his luxurious day to day existence. He'd fit right in with these oligarchical clowns we're told to worship, only he is a good boy except for when he eats my plants.
Our military and medical which are both government controlled are economic disasters that are destroying this nation. Three trillion on Viet Nam, Afganistan, Syria, and Iraq. Another trillion on a drug war on many drugs far less harmful than alcohol. Another two trillion a year regulating a medical system that ranks 37th while Canada ranks 30th at half the cost per person(the results have been recently altered through Google after I wrote a forum In Barrons that they checked for six weeks before they approved it). In short our government is degenerating at an accellerating rate and Biden is but on cog in the gear.
 
What exactly does Elon Musk have to do with TSM? One can use his example to argue that US should "invest" in Intel (which probably makes more sense Musk being an American entrepreneur and such). And, once again, you are confusing "government" with "investor" which is a major logical fallacy which renders all your arguments pointless.
 
What exactly does Elon Musk have to do with TSM? One can use his example to argue that US should "invest" in Intel (which probably makes more sense Musk being an American entrepreneur and such). And, once again, you are confusing "government" with "investor" which is a major logical fallacy which renders all your arguments pointless.

I just used Musk as an example of soneone who does a better job than government for litteraly pennies on the dollar. I have personaly worked many government projects that waste and inefficiencies are deeply ingrained.
 
Our military and medical which are both government controlled are economic disasters that are destroying this nation. Three trillion on Viet Nam, Afganistan, Syria, and Iraq. Another trillion on a drug war on many drugs far less harmful than alcohol. Another two trillion a year regulating a medical system that ranks 37th while Canada ranks 30th at half the cost per person(the results have been recently altered through Google after I wrote a forum In Barrons that they checked for six weeks before they approved it). In short our government is degenerating at an accellerating rate and Biden is but on cog in the gear.

The problem of rogue states and drugs exists but the methods governments use aren't working.

The guy that uses marijuana occasionally is one thing, captagon or "jihad meth" is another. Companies are pushing people for maximum profit but people are like robots they breakdown too. The drug trade use their customers and their families, to get favors. An addict employee will be a nightmare.
 
Please provide backup for 400 to 7000% return from NASA. I have personally and closely known government engineers who given direction to so called cook and twist figures and were very, very good at it. If NASA were actually this good, they would be self funding and turn a profit.
 
Except Elon Musk is funded almost entirely by the gov't, either through green energy tax credits (Tesla/Solarcity) or privatization of NASA (SpaceX).
For 1Q22, Tesla's gross margin was $5.46B, while regulatory credits were $679M. The regulatory credits were a new record. Clearly, the development of EVs have been subsidized by many countries, including the US, and while the goodness to society of these subsidies is easily arguable, it is not accurate that Tesla is "funded almost entirely by the government".
 
Please provide backup for 400 to 7000% return from NASA. I have personally and closely known government engineers who given direction to so called cook and twist figures and were very, very good at it. If NASA were actually this good, they would be self funding and turn a profit.

it is not accurate that Tesla is "funded almost entirely by the government".
Not so much in 2022, but there's no way TSLA gets where it is today without gov't subsidies. They way it took a nose dive after Twitter accepted Musk's buyout suggests that company is still built around a culture of personality, and now that real auto manufacturers are stepping in he needs to liquefy stock. Still, it's a far more ethical source of revenue than daddy's apartheid emerald mines that funded his early ventures. I'm curious as to how long it'll take his PR team to get people believing he invented Twitter just like he "invented" digital transactions and the electric car.
 
Not so much in 2022, but there's no way TSLA gets where it is today without gov't subsidies. They way it took a nose dive after Twitter accepted Musk's buyout suggests that company is still built around a culture of personality, and now that real auto manufacturers are stepping in he needs to liquefy stock. Still, it's a far more ethical source of revenue than daddy's apartheid emerald mines that funded his early ventures. I'm curious as to how long it'll take his PR team to get people believing he invented Twitter just like he "invented" digital transactions and the electric car.
I think you're giving Tesla far too little credit for their success. Last year Tesla sales were about even with BMW in the US, making it the very close #2 seller of so-called luxury cars. And Teslas no longer qualify for the $7500 federal income tax credit, but they're still selling as many as they can build. The people I know who own Teslas, and there's a lot of them, love them, even though IMO their build quality is worse than any Ford or Chevrolet I've seen recently. And with the exception of the Porsche Taycan, which is very expensive, the competition is mostly inferior, heavyweight vehicles based on IC-engine platforms. (Like the Ford Mustang EV.) I've test driven a Model S, and it is a compelling vehicle, even in its lowest price model. The Model 3s seem to be everywhere lately.

My personal opinion, FWIW, is that Tesla stock price is partially a reflection of Musk's perceived personal leadership skills, I do not agree with a lot of Musk's behavior on or regarding Twitter, and I think he's being silly by distracting himself with his Twitter buyout. I would not want to work for Tesla either hearing what I have about the engineering culture. But making Tesla's success out to be just a manifestation of reaping government subsidies is in, IMO, incorrect.
 
That was how all the fabs moved to Asia in the first place. If you rely solely on private sector, you will end up losing your critical infrastructure to the lowest cost area.
A LOT of that has to do with currency distortion. Blame Nixon for starting the race to the bottom by defaulting on Bretton Woods Agreement in 1971.

If you plot household dollar PPP, M1, offshoring, the US billionaire class (alongside an explosion in $10mm+ political households in the counties around DC), and generational declines in optimistic outlooks...couldn't be a clearer prime mover. And this dance won't end until 'the people' demand hard money again.

Tom Woods had a recent podcast episode diving into this that's worth a listen for anyone curious to hear more analysis. Jake Tran on youtube covers decently it as well.
 
Is there a third option? I don’t like govt involvement in fab business, it feels (not rational, just feels) like Russia - Ukraine, olicharchs seeking new plunder.

The third option, for me, is to consider breaking up monopolies, in a fair way. Intel, AMD, TSMC, Samsung, all are too big. Smaller pieces of Big Fab could unlock value if you let the free market in. Russia isn’t the only part of the world with an oligarch problem, US, TW and KR all have it.
 
Is there a third option? I don’t like govt involvement in fab business, it feels (not rational, just feels) like Russia - Ukraine, olicharchs seeking new plunder.

The third option, for me, is to consider breaking up monopolies, in a fair way. Intel, AMD, TSMC, Samsung, all are too big. Smaller pieces of Big Fab could unlock value if you let the free market in. Russia isn’t the only part of the world with an oligarch problem, US, TW and KR all have it.
Breaking up a successful ecosystem that contributes much to progress would be a tragedy and travesty, sort of like breaking up the US into 50 countries.
 
Is there a third option? I don’t like govt involvement in fab business, it feels (not rational, just feels) like Russia - Ukraine, olicharchs seeking new plunder.

The third option, for me, is to consider breaking up monopolies, in a fair way. Intel, AMD, TSMC, Samsung, all are too big. Smaller pieces of Big Fab could unlock value if you let the free market in. Russia isn’t the only part of the world with an oligarch problem, US, TW and KR all have it.
Uh... how are you going to break up monopolies on a global level? You think Korea is going to support breaking up Samsung and SK Hynix? Small pieces of fabs companies would have financing problems for building $15B fabs. Also, IMO, there's no such thing as a "fair way" to break things up. And scale is often a very good thing that benefits society as a whole.
 
Is there a third option? I don’t like govt involvement in fab business, it feels (not rational, just feels) like Russia - Ukraine, olicharchs seeking new plunder.

The third option, for me, is to consider breaking up monopolies, in a fair way. Intel, AMD, TSMC, Samsung, all are too big. Smaller pieces of Big Fab could unlock value if you let the free market in. Russia isn’t the only part of the world with an oligarch problem, US, TW and KR all have it.
There is no law against getting "too big" through legitimate competition and doing your job well. Nor should there be in my view. Why punish TSMC because it's competitors are less competent ? How does that benefit consumers who will then be forced to pay more for inferior products ?

I do not recognise this "US oligarch" phenomenon you suggest. Let's remember that the Russian oligarchs are a small group of people who - with no industry experience or knowledge - acquired ownership of state enterprises at massively discounted prices. That is totally different from technology companies started with financial and technical input from the founders and in which the founders have taken financial risks. These companies may be getting away with paying artificially low taxes, but they have not systematically looted the state on an industrial scale as happened in Russia.
 
I'm still waiting for some information to support the premise of this thread. Where has the US government said it would subsidize fab construction / operation? If this is part of the $52B CHIPS Act, which part?
 
I'm still waiting for some information to support the premise of this thread. Where has the US government said it would subsidize fab construction / operation? If this is part of the $52B CHIPS Act, which part?
Here's an excerpt from the summary of the bill. I've underlined the pertinent sentence.

The Department of Commerce shall, through the National Institute of Standards and Technology (NIST), carry out a program of research and development investment to accelerate the design, development, and manufacturability of next generation microelectronics, including through the creation of a Manufacturing USA institute for semiconductor manufacturing. Commerce shall also establish a program to match state and local government incentives offered to private entities for the purposes of building fabrication facilities relating to semiconductor manufacturing. Further, Commerce shall assess the capabilities of the U.S. industrial base to support the national defense in light of the global nature of supply chains and interdependencies between the industrial bases of the U.S. and foreign countries with respect to the manufacture and design of semiconductors.

 
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