Thread

1. baron816 · 1790866833 · focus · HN ↗

   Summary of why sovereign wealth funds are generally a bad idea: the governments don’t like to do things that could potentially harm their investments. If a government has large stakes in cigarette companies, they’re going to be resistant to regulate them.

   There’s also plenty of opportunity for corruption. But even with safeguards, there’s going to be opportunities to steer investment towards favored companies and industries and away from those that oppose the administration or otherwise do things the administration doesn’t like (think of efforts to divest from Israel or fossil fuel companies).

   “Just invest in the S&P”. Something like this would give substantial power to the index makers. But it also gives preference to already huge companies. Small, unlisted companies would be indirectly penalized by having to compete against companies with government funding.

   1. aeternum · 1790868707 · focus · HN ↗

      In the grand scheme of things, the gov claiming a perpetual 21%+ of all income of AI (all) companies is not all that different from owning a small percent of said AI companies. The financials and even incentives are basically the same.

      It's somewhat entertaining to watch both sides argue about this as if it's some major difference when both are actually aligned on wanting bigger gov and more gov ownership/control of corps (one party via taxes the other wants it direct).

      1. jfyi · 1790869422 · focus · HN ↗

         > gov ownership/control of corps

         Corporations are literally government sponsored entities. Where do you think they get their limited liability and separate legal personhood from?

         We should own a piece of every single one for that service we provide.

         1. scottyah · 1790870534 · focus · HN ↗

            Who is we and what is ownership? Taxes are nice because it's just straight cash, no meddling (other than the myriad of laws they must follow). "Ownership" meaning you want whatever political party/group in power in the moment to able to directly command businesses on top of adding laws and taking money seems a bit like overreach to me, in addition to being costly resource-wise.

            1. jfyi · 1790870793 · focus · HN ↗

               We the people who the government represents as a whole, and it can take many forms, yeah, but I am pretty partial to direct ownership of a percentage. The value we provide to these entities deserves it.

               1. [deleted] · 1790871986 · focus · HN ↗

                  [deleted]

               2. skinfaxi · 1790872083 · focus · HN ↗

                  > but I am pretty partial to direct ownership of a percentage.

                  What does that look like in practice?

                  1. jfyi · 1790872472 · focus · HN ↗

                     I was thinking we just move fast and break things. A little disruption never hurt anybody. I'm sure we can have all the kinks worked out in 2 years.

                     1. skinfaxi · 1790968161 · focus · HN ↗

                        Ah so you were just trolling.

                        1. jfyi · 1791040053 · focus · HN ↗

                           No, I am 100% serious. There is no reason to fuck around. Anything is better than the dystopian hellscape we are headed for currently. The time for discussion is past. The time for action is now. If corporations don't want this to happen, they need to get off their ass and start fixing what they broke before the people have to.

                           Also, you'd do better if you assumed good faith.

            2. franktankbank · 1790874069 · focus · HN ↗

               That becomes a tail wagging the dog ehh? Fed the one giving them money and the corps tell you what to do. Where does democracy fit in?
         2. baron816 · 1790873514 · focus · HN ↗

            As they say, if you owe a million dollars to the bank, the bank owns you. But if you owe a billion dollars to the bank, you own the bank.

            When an institution becomes financially dependent on something for its revenues, that something gains a lot of power over the institution.

            1. jfyi · 1790873820 · focus · HN ↗

               > that something gains a lot of power over the institution.

               Yeah, that hypothetical is terrifying! It's not like our entire government is in the pocket of the largest of these corporations anyway! That would be an entirely new scenario that we should avoid at all costs!

               1. baron816 · 1790878465 · focus · HN ↗

                  There are countries where the entire government is the pocket of the largest corporations. The US is not one of those countries. It can get much worse if you allow it.

                  1. jfyi · 1790878833 · focus · HN ↗

                     We clearly disagree, but that's ok.
               2. idiotsecant · 1790881635 · focus · HN ↗

                  Just because you have a bee in your car doesn't mean you should ignore the hive growing in the trunk. It's silly to reject all threats because a less severe version of that threat already exists.

                  1. jfyi · 1790936141 · focus · HN ↗

                     See, the problem with your analogy is, the way I see it, you are the one ignoring the hive in the trunk.
         3. aeternum · 1790878821 · focus · HN ↗

            That's my point, the gov already owns a ~21% royalty on the income of every company that operates in the US via the corporate tax. And it's more than that if you consider other taxes.

            1. jfyi · 1790936383 · focus · HN ↗

               Good, then we are in agreement that it's already on the table. No reason to avoid making some adjustments rapid iteration style.
         4. idiotsecant · 1790881529 · focus · HN ↗

            I would make the case that government ownership of the machinery of commerce makes both worse. The money and power inherent to this arrangement is corrosive to both sides. Keep them separate and let each fight the other to the proper tension point. If we want revenue there is already a way to do that - we call it taxes
      2. JumpCrisscross · 1790878996 · focus · HN ↗

         > the gov claiming a perpetual 21%+ of all income of AI (all) companies is not all that different from owning a small percent of said AI companies

         We don’t count reduced taxes as a loss in the same way as losses on equities owned. That changes the electoral incentives.

   2. jfyi · 1790868741 · focus · HN ↗

      > the governments don’t like to do things that could potentially harm their investments. If a government has large stakes in cigarette companies, they’re going to be resistant to regulate them.

      The ideal in a democracy would be that we behave as adults and make the decision where to draw the lines.

      ...and yeah, corruption is a problem, but it's going to find a way regardless of what we throw at it. We would be better off handling the existing corruption than worrying about some hypothetical future corruption as a reason we can't try new things.

      1. baron816 · 1790869956 · focus · HN ↗

         I think what we’ve found with the current administration is that people will use every last surface for corruption and power that they can. The more you opportunities you give the government to be corrupt, the more corrupt they’re going to be.

         1. scottyah · 1790870624 · focus · HN ↗

            Also of note: this is not the first administration to take controversial action. Pretty much every government ever has shown that more power = more corruption.

            1. klaff · 1790874669 · focus · HN ↗

               Also of note: this administration has taken corruption to levels not seen before.

               1. jfyi · 1790936918 · focus · HN ↗

                  I agree, it's hard to let someone get all hand wavy about hypothetical corruption right now. That ship has sailed and is sinking as we speak.
   3. [deleted] · 1790869498 · focus · HN ↗

      [deleted]

   4. redwood · 1790869498 · focus · HN ↗

      Doesn't need to be the S&P. Can simply be the entire market float market share weighted

      1. baron816 · 1790870041 · focus · HN ↗

         That’s still providing an implicit subsidy to listed corporations
   5. FrustratedMonky · 1790870786 · focus · HN ↗

      There's a reason every country with a sovereign wealth fund is a dictatorship, its a really handy way to launder money, steal. Which is why Trump wants it.

      1. carefree-bob · 1790870986 · focus · HN ↗

         Norway is a dictatorship?

         1. Avicebron · 1790873115 · focus · HN ↗

            To play devils advocate, the fact Norway has a coherent society/population makes it dictatorship of the demos. Which of course is evil since people who refuse to integrate into society aren't allowed to dicate terms.
         2. FrustratedMonky · 1790874130 · focus · HN ↗

            One working model versus a dozen others? Kind of like, I didn't wear a seat belt and lived, so guess we don't need them.
   6. geysersam · 1790872508 · focus · HN ↗

      This is theory. If we look at the real world, do sovereign wealth funds typically invest in cigarettes? I don't think so. I think they typically have more stringent ethical guidelines than most regular funds.

      I'm typically not in favor of sovereign wealth funds anyway. Because I don't buy the idea that the free market is always more efficient than the public sector, and if that's the case then investing the funds in the public sector, schools and improving health and social outcomes, is better than buying SpaceX even if they're going to the moon.

      Of course there are exceptions.. if a country has more money than they know what to do with, it makes sense to pile it.

      1. voxic11 · 1790872804 · focus · HN ↗

         Its not a sovereign wealth fund, but China 100% owns China Tobacco and has generally avoided policy changes which could encourage people to stop smoking because it could hurt this extremely profitable company (China Tabacco has about 2x the before tax profit of Apple). <a href="https:&#x2F;&#x2F;www.theexamination.org&#x2F;articles&#x2F;deadliest-company-in-the-world" rel="nofollow">https:&#x2F;&#x2F;www.theexamination.org&#x2F;articles&#x2F;deadliest-company-in...

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