I suppose you could announce tariffs which will take place 5 years down the line? And ramp it up over time?
ie. the current bill only passed because both political parties are fine with giving companies government money.
Intel is still a very large player in chips and dominate in some areas. Even TI which has tons of fabs (not highest end) as well. I don’t really understand this.
Analog gets some signal integrity benefits from larger transistors, and often we have fairly large fets for low rdson and high voltage tolerance.
No company presently appears to be poised to build out significant domestic chipmaking capability as far as I know.
I believe that this is where subsidization makes sense, because if we wait for the free market to catch up to the shortfall in supply created by raising import costs, it will ultimately take longer to get the manufacturing capacity online.
Can you imagine a world where US airlines had to depend on either Airbus or Sukhoi planes? Do you really think that would be better?
Boeing effectively lobbied to regulate others out of existence. Bought off who they could, then won grants and contracts because there was no one else.
Can you elaborate? How was Boeing subsidized in this instance and SpaceX not? It's my understanding that it was closer to the other way around. Both Boeing and SpaceX won commercial crew contracts, but Boeing (at the time) had a stronger track record. It was a strategic move by NASA to not put all their eggs in one basket and it worked out well by subsidizing the early dark horse (SpaceX).
Are we going to pretend 737MAX wasn't grounded for a year and half after 2 devastating crashes killing 346 people? I think a world without Boeing would have been clearly better?
I seriously think you should consider reading the history of air travel, they don't say "regulations are written down in blood" for no reason. There's been many an accident due to a mechanical fault that's eventually remedied.
Its a tragedy but you seriously have to take a breath and think a little. If you want to get into a pissing contest over aircraft manufacturers, the air France 447 (airbus plane) crash was largely caused by the inputs being averaged together. On a Boeing plane, the inputs are synced (one side pushes down, the other side goes down as well). Maybe we should eliminate airbus as well.
You can't call Airbus's design decision to average the inputs a "mechanical fault", somehow that got approved by regulators.
You are damning Airbus with the same attack you are aiming at Boeing.
The 737-MAX crashes are absolutely horrific and how the FAA responded was terrible. The design was shit and should have had better review, same for Airbus and what caused France 447.
I also agree that subsidizing R&D isn't a reliable strategy to make us more competitive. Government incentivizes to find solutions works much better.
BUT building high-end fabs is SO very capital intensive, that I think this actually could work out. This might actually be a case where the skids need to be greased a bit (to the tune of billions of dollars) to get them over the hump and back in the game.
Is the market really free with tariffs?
The US federal government was initially only able to make revenue from tariffs. Basically you control the borders, but inside the borders there are no control (ie free market). Once you deal between nations, you cannot have a perfectly free market, else your enemies will eat you. Which imo is what happened the last 50 years.
US policy can't force South Korea or Taiwan to have a free market. No matter what we do, any domestic company has to be able to compete with Samsung and TSC. Because of that, there is no purely "free" global market.
Either you change the rules at the border (tariffs), you match your competitors' strategy (subsidize), or you lose.
It’s more of a political slogan than an actual policy.
Well, which do you want? You can't have both.
If such a thing existed then you would be right.
because we know there is a large and likely growing demand for semiconductors, it's not a very risky bet for us to be subsidizing it via trade restrictions for some finite amount of time.
If anything, the more something resembles a "free market", the worse it is - you don't think Intel wouldn't poison the water supply if it juiced the Q4 earnings?
It's always more economical to just dump the toxic waste into the local river. If anything these subsidies even the playing field for people who don't think that's a good idea.
I agree “free market” today is insane. Initially the federal governments only source of revenue was tariffs, so it would protect domestic production. This makes the US independent and wealthy.
You can’t have an international “free market” system unless you don’t want to protect domestic production. Which imo is what the US did starting in the 70s until today.
Dear reader, this was not true in any shape.
The self-interest of each human being, his continual search for whatever he wants, is a natural law. Governments can make it difficult for him, but their roadblocks only cause him to seek other avenues in order to get what he wants.
As a result, the General Market will always triumph eventually whenever there's a conflict between consumer desires and government interference. And it's vitally important to understand this. For it's the reassertion of the market's sovereignty as the ruler of the world that's causing today's economic upheavals."
- Harry Browne 1974 (but just as relevant today).
> The self-interest of each human being, his continual search for whatever he wants, is a natural law.
It also seems to place the government in direct opposition with the wants of consumers, without acknowledging at all the fact that markets are just as often made unfree by the actions of its private actors.
Example please.
Since this is HN though maybe these will ring a bell :
* Intel's rebate program (https://www.ftc.gov/news-events/news/press-releases/2010/08/...) which ended up with a $1.2B payment to AMD
* Microsoft's notorious antitrust case (https://en.wikipedia.org/wiki/United_States_v._Microsoft_Cor....)
* AT&T abusing its monopoly status and being broken up (https://en.wikipedia.org/wiki/United_States_v._AT%26T)
Honestly this is such an obvious notion that the fact that you're asking for examples is suspect on its own.
Look at GE or Boeing, it didn’t work out.
What works is a free market. Raise import costs on CPUs and you’ll incentivize building in the US and more companies to form. It costs $0 tax dollars and brings in revenue and high paying jobs. Similar to what we did with car manufacturing.