In reply to: I actually think that CHIPs is bad policy. posted by EricCartman
My point is that the demand for chips has never been higher. Between the AI boom, and everything from cars to refrigerators becoming more complex and computer driven, there is insane demand for chips.
Given this level of demand, companies should be able to find private capital to fund new projects. Why does the government need to step in and subsidize what is a robust and healthy industry?
I do understand the national security angle. It just feels like a convenient excuse to hand out cash and engage in crony-capitalism. How far can we stretch the scope of national security to include other industries?
In part because of the cost of permitting, and in part because of the cost of labor.
The interstate highway system was justifed under the guise of national security. In reality, Ike just liked the autobahn.
If the cost of permitting is an issue, then the CHIPs Act should address the permitting process, instead of throwing money at a broken process.
Funny that you mention the cost of labor, when the CHIPs Act forces companies to provide a laundry list of liberal labor/ benefit policies to obtain funding.
From the NYT:
For one, the department will require companies seeking awards of $150 million or more to guarantee affordable, high-quality child care for plant construction workers and operators. This could include building company child care centers near construction sites or new plants, paying local child care providers to add capacity at an affordable cost or directly subsidizing workers’ care costs. Ms. Raimondo has said child care will draw more people into the work force, when many businesses are struggling in a tight labor market.
Applicants are also required to detail their engagement with labor unions, schools and work force education programs, with preference given to projects that benefit communities and workers.
Other provisions will encourage companies, universities and other parties to offer more training for workers, both in advanced sciences and in skills like welding. The department said it would give preference to projects for which state and local governments were providing incentives with “spillover” benefits for communities, like work force training, education investment or infrastructure construction.
This is part of the Biden administration’s “worker-centered” approach to economic policy, which seeks to use the might of the federal government to benefit workers. But some critics say it could put the program’s goal of building the most advanced semiconductor factories at risk, if it adds excessive costs to new projects.
COVID was an interesting exercise in evaluating impacts of supply chain disruption. Per earlier comments, free markets would tilt the scales to off-shore manufacturing and would create serious national security issues if we were cut off from supply.
Especially when it came to PPE, which China dominates. The other issue is pharmaceuticals, which are now mostly produced in China. We gutted Puerto Rico's production capacity back in 2006, when we changed the 936 tax rule.
If we are interested in on-shoring production, this seems like an easy switch to flip, since we infrastructure is already in PR. (I do acknowledge that the Rx industry should foot the bill for this too, I am just focusing on ways to improve the supply-chain for critical items).
by Laura Branigan.
"Gloria" indeed.