The China Thread

[OttoVonBismarck]

Right, the goal of steps we're taking now should be to shore up domestic chip production for critical national defense and infrastructure industries. We should also take a bit of a global approach to trying to purchase and invest in chip production in non-Chinese/Taiwanese sources as much as possible. The perfect can often be the enemy of the good, we cannot insulate ourselves from the risks of Chinese domination of the chip market in case of a Taiwanese invasion, but that does not mean we should not even attempt to alleviate the problem. I'd note that something to remember is unless Taiwan were to capitulate bloodlessly, it is highly likely much of TMSC's assets would be damaged or destroyed in an all out war, and chip fabs don't get repaired in a few weeks or even a few months, they take years to get built.

This is yet another glaring fault of entrusting things of high national concern to the sole vagaries of the free market, there are probably good economic efficiency reasons so much of the world's chip manufacturing happens in Taiwan. But it is not good "industrial policy" (which the United States has lacked for over 40 years.)

[Crazy_Ivan80]

Iirc both Belgium and the Netherlands have some advanced chip production but not in amounts that rival Taiwan. Not by a mile.

[Josquius]

Right, the goal of steps we're taking now should be to shore up domestic chip production for critical national defense and infrastructure industries. We should also take a bit of a global approach to trying to purchase and invest in chip production in non-Chinese/Taiwanese sources as much as possible. The perfect can often be the enemy of the good, we cannot insulate ourselves from the risks of Chinese domination of the chip market in case of a Taiwanese invasion, but that does not mean we should not even attempt to alleviate the problem. I'd note that something to remember is unless Taiwan were to capitulate bloodlessly, it is highly likely much of TMSC's assets would be damaged or destroyed in an all out war, and chip fabs don't get repaired in a few weeks or even a few months, they take years to get built.

This is yet another glaring fault of entrusting things of high national concern to the sole vagaries of the free market, there are probably good economic efficiency reasons so much of the world's chip manufacturing happens in Taiwan. But it is not good "industrial policy" (which the United States has lacked for over 40 years.)

Baring in mind that we run liberal economies that don't work in a top down, state chooses to build a factory, fashion...how is this done?

Tariffs on Taiwanese chips? Tax breaks for domestic producers? Carbon taxes for anything from the other side of the world?

[Admiral Yi]

Tax breaks for domestic producers?

Or low interest loans. 

I hope that people keep in mind the next time Bernie Sanders mewls about corporate welfare that this kind of thing is what he is talking about.

[Jacob]

Or low interest loans. 

I hope that people keep in mind the next time Bernie Sanders mewls about corporate welfare that this kind of thing is what he is talking about.

As with any kind of welfare it's not generally the basic idea that's controversial. Usually it's the broad scope, specific implementation, and possibility of misapplication that's up for debate.

[Zoupa]

Tax breaks for domestic producers?

Or low interest loans. 

I hope that people keep in mind the next time Bernie Sanders mewls about corporate welfare that this kind of thing is what he is talking about.

While you're technically/semantically correct, that is definitely not the gist of what he's talking about. I'm pretty sure you know that.

[crazy canuck]

Tax breaks for domestic producers?

Or low interest loans. 

I hope that people keep in mind the next time Bernie Sanders mewls about corporate welfare that this kind of thing is what he is talking about.

While you're technically/semantically correct, that is definitely not the gist of what he's talking about. I'm pretty sure you know that.

Rather than Yi being intellectually dishonest, it is possible he really does not understand.  Given the positions he normally takes on economic matters, there is a lot of reason to think it is the later rather than the former.

[The Minsky Moment]

Yi is right about Bernie's position: https://www.sanders.senate.gov/press-releases/prepared-remarks-sanders-files-amendment-on-microchip-legislation-to-restrict-blank-check-corporate-welfare/

[Josquius]

I'm confused at these past few posts.

[crazy canuck]

Yi is right about Bernie's position: https://www.sanders.senate.gov/press-releases/prepared-remarks-sanders-files-amendment-on-microchip-legislation-to-restrict-blank-check-corporate-welfare/

You give Yi's posts a charitable reading

[Jacob]

Yi is right about Bernie's position: https://www.sanders.senate.gov/press-releases/prepared-remarks-sanders-files-amendment-on-microchip-legislation-to-restrict-blank-check-corporate-welfare/

To what degree do you think Bernie's objections are about accountability and ensuring the money is being used efficiently to pursue the national interest vs about not wanting to use money to support a strong domestic microchip industry at all?

Because I can totally see merit in "let's not throw billions of dollars at companies who'll just pocket them and just say 'national security' to shut down any questions." On the other hand, I think spending billions of dollars to actually ensure a strategically critical supply of microchips is very valid.

[Admiral Yi]

While you're technically/semantically correct, that is definitely not the gist of what he's talking about. I'm pretty sure you know that.

You are wrong.  Please tell me the gist.

[Admiral Yi]

To what degree do you think Bernie's objections are about accountability and ensuring the money is being used efficiently to pursue the national interest vs about not wanting to use money to support a strong domestic microchip industry at all?

Because I can totally see merit in "let's not throw billions of dollars at companies who'll just pocket them and just say 'national security' to shut down any questions." On the other hand, I think spending billions of dollars to actually ensure a strategically critical supply of microchips is very valid.

Did you read the link?  He's pretty clear about what he objects to and what he wants changed.

[Jacob]

Did you read the link?  He's pretty clear about what he objects to and what he wants changed.

I didn't, which is why I'm asking.

[Admiral Yi]

I didn't, which is why I'm asking.

He objects to giving money to firms which are making profits and pay their CEOs large salaries.

His proposed amendment says that if the firms make a profit using this money, the government must be repaid a reasonable rate of return.  Also the firms may not buy back their stocks, offshore production, void union agreements, or interfere with union organizing.