Private investors must choose to risk their own capital. They get the gains and the losses…and absorbing losses forces them to see the best risk adjusted returns. Government doesn’t have that, so they will pursue investments in companies they themselves think are important to political goals, not the public. You are naive to think this misalignment in incentives won’t happen. Also… Elections produce short time horizons and don’t factor in long term company growth, and the public can’t fire their “fund managers” when policies shift like that. The state also becomes the regulator, taxer, customer, and rescuer if shit goes south - so many conflicts of interest. 😂 No private investor would have that fiduciary conflict so their money is immediately better off there.
Borrowing money to buy equity on the public’s behalf …..All you’re doing at the end of the day is shifting all the risk to the public.
Markets also raise the cost of capital for weak businesses and lower it for the strong businesses. Politicians investing disturbs that. Connected firms get cheap capital while other companies that can generate better returns don’t. Softening a bad companies budget constraints like this weakens bankruptcy discipline.
This is crazy government overreach. A bunch of politicians thinking they know best with what to do with peoples money.
@Ross__Hendricks Meaning - the capex on the technology itself is part of the story. The other assets of an organization that aid in adoption is the other half.
Interestingly enough I was just investigating this with similar thoughts.
One of the things I’ve found is that productivity follows a “J-Curve”…described by a dip in productivity when a technology is introduced in the market. Investments in complementary assets (organizational restructuring, human training, policy implementation) is what gets us toward the upward slope of the “J”….positive trending productivity.
@RandPaul Thank you. The budget deficit is unsustainable, and it’s discouraging to see no one is taking it seriously. As the government endlessly spends, inflation and interest rises, and life becomes slowly more and more unaffordable. It should be primary focus of every person.
@piersmorgan It’s funny the comment that we call it “soccer”. The word was created by the English… short for “Association Football.” You guys made the word…. 😂
I’ve not been politically active recently. It’s because I can’t quite grasp the political approach to decision making and problem solving that is used to solve our problems. Knowledge and information exist on a spectrum, and bias in knowledge leads to poor decision making. Political parties supercharge bias at scale by predetermining beliefs, and poor leadership espouses those beliefs in an extreme way to divide the country. It’s sad to see. A third party introduces deeply needed nuance in the political discourse to drive us more toward a model of rational decision making. It’s a cause that I think will mobilize me to contribute again. Thank you.