Intel lobbied hard for the CHIPS act and they announced that they will be scaling back their expansion plans TWO DAYS after it passed lmao.
Every dime of that $52 billion will be devoured by shareholders. Nothing will be built with it. China will reach femtometer-sized chips while the US continues begging and bribing capitalists to do literally anything helpful.
yeah, well, maybe if you didn't want that, you shouldn't have been such a damn dirty communist whose fault this all is.
dont ask how. that's childish.
pressing national security issue governments will dump infinite money into
vs
keeping the grift going a little longer
see, you just dont understand the lean agility of the free market.
no but see this is just capitalist magic. see, you pay your shareholders, and then a wizard will fix it. a grand wizard.
and then you have slave labor and it's more profitable to actually make things again!
We wouldn’t mind the action of continuing to pay dividends and growing them over time if it that didn’t affect their new fab buildouts and turn-around plan.
but isn't capitalism supposed to be perfectly rational actors using their enormous, innovating brains to select the best possible course of action? Would they really undercut their own production just to preserve the income of a few investors who have nothing to do with the manufacturing process? Sounds like capitalism only works in theory.
We were wrong about Pat Gelsinger and his mission for Intel. In the past we wrote how he changed Intel’s strategy and is “Betting The Farm” by investing heavily in their core business.
[excerpt form Oct 2021 article] Intel could follow the path of many other American goliaths such as IBM and General Electric. A slow slide to irrelevancy, spinning off business, and bringing shame to what was once pride for American ingenuity. Instead of that conservative route, they are going to bet the farm, spend every dime they make on investing in more manufacturing, design, and in general catching up in technology.
We even believed that Pat Gelsinger was changing the culture that Intel has and was throwing everything including the kitchen sink at restoring Intel to their former standing. We want to apologize to as we were wrong.
at least they admit it
but isn’t capitalism supposed to be perfectly rational actors using their enormous, innovating brains to select the best possible course of action?
the anglo-european brainpan is clearly deficient
liberals when poor people are being evicted in the middle of a global pandemic
who's gonna pay for that?????? u dont understand economics, sweaty slippery slope! i am very smart!
liberals when all of their taxes go straight into the pockets of billionaire shareholders
:blob-no-thoughts:
no it's fine; a (grand) wizard will fix it, and all the things will get made, and nevermind where your one black friend ™️ ©️ ®️ went.
And for a great big payout from the CHIPS act. Certainly all that will be reinvested into production.
...right?
I actually wrote a paper on this my final year of grad school.
Companies, particularly large ones, will always use unexpected excess cash for share repurchases or dividend payouts for several reasons
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Executives are increasingly conpensated in short and long term incentives (read: they're rewarded for the company performing well and with stock options)
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Almost every large company does buybacks, something like 94% of the companies on the S&P 500 had done a share buyback in the preceeding year as of like 2017, because
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Share buybacks help inflate performance metrics, which is essential since most of your competition is doing them (and since executives are rewarded on the basis of 'company performance'...)
Gotta hand it to good old saint Regan sticking a fucking investment banker in charge of the SEC, because that's how these became legal; prior to that, they were EXTREMELY regulated and basically impossible to do.
I always thought another reason was simply that “reinvesting to grow the business” is a complicated, high risk process that can take years to see the benefits from, and they’d rather just pocket the windfall than try to increase output and possibly lose it all, would you say this is a factor based on your knowledge of economics?
I wouldn't say my knowledge of econ is that great lol.
That said, yes, to an extent. Firms which are already listed on stock exchanges and are sizeable (or at least comparable to their competitors), will generally use the cash for more shortsighted purposes; this is typically partially because of the aforementioned stuff, but also because firms have generally already laid out budgets and 'planning' for the next few years.
That cash windfall is not useless, but for a given corporation is not immediately useful; it's not earning anything, it's not doing anything, it's just 'there'. So many executives see the greatest immediate ROI as the best use of it (unless they have a crises elsewhere), and that typically is (surprise) share buybacks. It could also be used as collateral to take out loans when interest rates and LIBOR were still verrryyy low, the loans then being used to do the buyback (I imagine that is less common currently).
Which just shows how capitalist economics is kind of irreparably broken. Shareholders are rewarded, financial brokers/investment firms will consider it a good use of capital which helps boost the stock, the firm itself benefits from performing the buyback as it will compare more favorably to its peers than if it did not, and it gains back stock it can reissue at a later date (not to mention the executives giving themselves bonuses, essentially). So it is a fantastic short term use of capital.
But of course, nothing tangible is produced, workers gain little to nothing (unless they are one of the very rare firms that also compensate workers via stock options), and consumers will likely not see any benefit themselves.
It could be declared illegal again, but good luck putting that genie back in the bottle when damn near every firm on the NYSE does share buybacks
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:cheems: p-please imvest im imframstrumcture
:capitalist-laugh: Buyback time!
:swole-doge: OUR FACTORY NOW, FACE THE WALL
:porky-scared-flipped: :stalin-gun-1::swole-doge:
I'm surprised that I haven't seen some lib try to fix this problem by suggesting the CEO's only own stocks in competitors. Justifying this along the lines of, competition makes everybody more successful.
I expect people are just so exhausted, frightened, and beaten down that it doesn't register. Plus the way the government has been printing money 52 billion just doesn't seem like a lot anymore.
billions in subsidies from the US and EU CHIPS Act’s
lol the EU gave money to Intel?
Even more ironic considering Intel had to delay their 7nm chip for the 3rd(4th?) year running while China have started production despite the US doing their utmost to fuck them over.
