American Ai/Car manufacturers could build cheaper/open models, some do, the big ...

juiceland · 2026-09-21T23:01:15

It is the natural result of a country run by lawyers. China is a country run by engineers.

nxm · 2026-09-22T00:41:21

That doesn’t explain the decline of German automotive industry which is now taken over by Chinese cars thanks to massive subsidies by the Chinese government

eru · 2026-09-22T02:48:53

Why? Germany is also run by lawyers.

See eg https://en.wikipedia.org/wiki/Friedrich_Merz#Private_sector_... for the current chancellor. Many past chancellors were also lawyers, and many members of the Bundestag were and are lawyers.

I don't know whether having lawyers in power leads to industrial decline. My point is only that you can't use Germany as a counterexample.

verdverm · 2026-09-22T02:49:39

Do we consider the US Chips Act to be a subsidy? What about when GM became Government Motors because it was Too Big To Fail?

In other words, when do economic and industrial policies transition to subsidies? Is it a matter of perspective? Is the devil in the details?

creato · 2026-09-22T05:58:11

It's a matter of scale: https://www.wsj.com/world/china/the-u-s-has-been-spending-bi...

If you trust Google's AI summary, China spends 4-5% of GDP on industrial subsidies, vs US at 0.4%. 10-12x as much.

verdverm · 2026-09-22T06:07:39

What about after accounting for PPP? (https://en.wikipedia.org/wiki/Purchasing_power_parity)

Do the US numbers account for state level incentives like tax breaks?

I for one do not trust Google summaries, having seen too many hallucinations, it has pushed me away from their search and ai completely.

verdverm · 2026-09-22T06:24:37

Here are some links I found (among many). I tend to trust CSIS, even though the have many hawks, they are generally thorough and nuanced.

https://www.csis.org/analysis/red-ink-estimating-chinese-ind...

Some historical analyses of US policies (know less, but both put it over 1% currently, nuances)

https://www.columbia.edu/~ev2124/research/ErtenStiglitzVerho...

https://www.nber.org/system/files/working_papers/w34744/w347...

I'm honestly not sure why this is seen so negatively. It seems to be working pretty well for them, perhaps we should do similar instead of whining about others being more effective?

verdverm · 2026-09-22T15:03:45

Another point of comparison we might make, how close is Trump's desired increase to the US Defense budget to what China is spending on industrial subsidies? It looks relatively close to numbers in these research papers.

It would seem that $0.5T could be better spent

verdverm · 2026-09-21T23:08:53

I think it less about lawyer vs engineers and more about money in politics (now unlimited)