carranza2 -- If the government purchase of INTC is ". . . all about national security . . . , " wouldn't the same rationale apply to purchasing Boeing, Lockheed, Northrop, Texas Instruments, and other firms deemed vital to the national security?
Too many other issues infect the government's decision to buy not a majority stake but only a big enough portion to allow heavy handed influence over Intel's policies – in other words, pay to play. This strategy never works out well in the long run and generally harms both national security and taxpayers as well. It is diametrically opposed to view of investment experts such as Warren Buffett, who searches for well run firms whose managers love their work, and produce uncommonly good results accordingly. Buffett has never approved of taking over company management or banking on a turnaround from new top officials.
If a company management results in a culture that creates inferior results, then, under a reasonably effective market system, the company will eventually fail. That is a better outcome than the counter strategy that says some companies are too big to fail – especially banks and automobile firms, which have received some form of government assistance in the past.
There are, moreover, too many conflicts of interest that arise with government ownership, especially when a proposed takeover is made known to only a favored few government officials, who in turn can make money (illegally) on the inside information. Too much of this going on today, which could convince institutional investors to withdraw from any incentives to invest in government partially owned firms.
Art |
