82 points by measurablefunc4 days ago | 76 comments
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I know it is not the same thing, but in case people aren't already aware, Alaskan residents have long owned stocks in private companies.
It is called the Alaska Permanent Fund and a constitutionally established sovereign wealth fund invested in a diversified portfolio and managed by a state-owned corporation, the Alaska Permanent Fund Corporation.
Earnings help fund the state government and annual dividend checks are distributed to residents.
The investments listed here in the article make this seem like an effort to shore up or incentivize industries or companies that are integral to national defense. One example, in the ongoing US-China trade war one of the strongest moves China did was put [export controls on rare earth minerals][1] which are essential components across technology, defense, and healthcare to name a few. The government investing in these companies isn't ideal from a free enterprise perspective but seems rational from a national security perspective.
There was a really interesting episode of EconTalk podcast about 6 years ago which had a guest (woman, if it helps find it) arguing that the US gov should invest in and have ownership of a lot more startups, similar to how they funded Tesla.
In-Q-Tel's been at it since '99, funded Keyhole before Google bought it and turned it into Maps. Difference is IQT doesn't take equity stakes in public companies after bailouts, it seeds early startups for capability, not to prop up balance sheets.
i think an important nuance and the reason we don't suddenly have a sovereign wealth fund is it’s not a centralized US Gov buying stakes. It’s a bunch of different government entities using different pools of capital
- Commerce dept: Intel, IBM quantum, GlobalFoundries, D-Wave, Rigetti, xLight
- Dept of "war": MP Materials for rare earths, L3Harris rocket motors for munitions
- Energy dept: Lithium Americas / Thacker Pass, Westinghouse nuclear
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.
Anyone actually tracking aggregate exposure across these pools? If Commerce's Intel stake and some other dept's stake both need propping up in a downturn, who decides priority — is there any cross-agency accounting or is each one just flying blind on the others' books?
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
Where's the cutoff line though? We're at 40 people, comfortable revenue, no interest in going public or hitting whatever headcount trips this. Companies would just stay small on paper, split into shells, whatever it takes to dodge it.
Just remember Piketty too, Capital in the 21st Century: the purpose is not generate revenue. It's too prevent extreme concentrations of wealth & power, to diffuse the un-democratic dangers hazards and threats.
That's confusing. The rich make their money and hold their assets in economically productive (or extractive) enterprises. Land, factories, services, arms, etc are the real storehouses of wealth. If you take that from the rich, they have nothing.
I am not the original commenter, but I interpret it to mean that large corporations can almost always arrange it so that they don't pay tax or don't pay their fair share of tax. 88 companies paid $0 tax on $105B in profit in 2025[0]
> 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.
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.
I've seen this assertion a few times now in the thread here, can you elaborate? The events of 2008 were kind of extraordinary, so I'm not sure we should shape all of our policy based on that - except in terms of trying to avoid another 2008/Great Recession, but I don't see these actions doing that.
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.
Really? It is quite fashionable to call the US fascist while going gaga at other countries that have similar or worse conditions. Let me bring receipts.
The most striking difference is that top investors in Europe hold much higher stakes than in the United States. The top ten in Europe features several governments.
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.
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.
>> For all the current US administration has complained about the opposition being “socialist,”
Not a dog whistle when its actually true. How many more DSA candidates need to be elected before you stop saying this?
Candidates endorsed by the Democratic Socialists of America have scored victories in 35 primary elections so far this year, including upsets against entrenched incumbents.
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
Yeah we've been tracking this kind of thing for a client and honestly the easiest signal is just watching Treasury's direct loan/equity disclosures each quarter. It's not new, just louder and more public than the bailout-era stuff was.
Now the government has an extra incentive to get rid of unions entirely so that the company (and the government shareholder) makes more money. So yes, option B.
They also have an incentive to use legal pressure to suppress competitors. But I am sure this (and other administrations) would never throw their weight around for fun and profit. /s
If the left had done this, they would have been attacked for "socialism." But since it's a right wing administration doing it, it becomes "national security industrial policy."
This isn't communism. It's state capitalism that socializes losses and privatizes profits.
It's bad communism and bad capitalism at the same time.
I'd like to call this 'Napoleonism,' after the pig Napoleon in George Orwell's Animal Farm
Have we come full circle now with China inspired by American Capitalism to create their own model of it, that now inspires the Americans to imitate the Chinese?
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.
If the US government got nonvoting shares in startups along with VC's then that could bring in lots of revenue from capital gains without calling it "taxes."
If it were in return for a tax break then they might even do it voluntarily. The key would be to get in while valuation is low.
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.
I am happy with this. There needs to be more democratic control of the economy, as the people who have been running American countries have been consistently making decisions that are against the national interest. There's risk to it, but the status quo is not something to be happy about either.
Worked adjacent to a state pension fund with equity stakes—the whole design was arms-length governance specifically so politicians couldn't cherry-pick companies to prop up or punish. This stuff has none of those guardrails yet. That's the actual risk, not the ownership itself.
It is called the Alaska Permanent Fund and a constitutionally established sovereign wealth fund invested in a diversified portfolio and managed by a state-owned corporation, the Alaska Permanent Fund Corporation.
Earnings help fund the state government and annual dividend checks are distributed to residents.