We are developing the social individualist meta-context for the future. From the very serious to the extremely frivolous... lets see what is on the mind of the Samizdata people.

Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]

Do want subsidized chips with your policy, sir?

“Government subsidies are never free, and now we are learning the price U.S. semiconductor firms and others will pay for signing on to President Biden’s industrial policy. They will become the indentured servants of progressive social policy.”

Wall Street Journal. ($)

A couple of follow-ups:

Democrats last year snookered Republicans into passing their $280 billion Chips Act, which includes $39 billion in direct financial aid for chip makers and a 25% investment tax credit. Republicans hoped this would satisfy West Virginia Sen. Joe Manchin, but after Chips passed he quickly flipped and endorsed the Inflation Reduction Act.

Now the Administration is using the semiconductor subsidies to impose much of the social policy that was in the failed Build Back Better bill. On Tuesday Commerce Secretary Gina Raimondo rolled out the new rules for chip makers and summed up the politics to the New York Times: “If Congress wasn’t going to do what they should have done, we’re going to do it in implementation” of the subsidies.

For a fascinating insight into the arguments and geopolitical tensions around silicon chips (and the role of Taiwan), I recommend Chip Wars, by Chris Miller.

Every time I look at Joe Biden and his allies, and particularly at Biden, a machine politician with beady little eyes and wandering hands, I think of an Ayn Rand villain.

9 comments to Do want subsidized chips with your policy, sir?

  • bobby b

    ““If Congress wasn’t going to do what they should have done, we’re going to do it in implementation” of the subsidies.”

    What sorts of things does she mean? Hiring practices? Siting?

  • A different JJM

    No doubt that part of the fine print in the requirements for getting a subsidy will eventually include implementation of some specific features in chips or chipsets. Think cryptographic backdoors of varying kinds, mandatory functioning internet connection for operation of OS’s and communications apps, non-disablable GPS (or other locator) for all motherboards, and so on.

  • Michael Taylor

    So basically embracing the Chinese model, then.

  • bobby b

    Aha. Found a non-pay site.

    Chip makers will have to provide expensive child care for workers so that more women will be employed. They will need to meet women-employment targets.

    They will have to follow the union-led Prevailing Wage rules. (High wages.)

    They will have to allow – even encourage – union representation of workers.

    Paid family leave, paid sick leave . . .

    No plants in union-hostile states.

    In short, the bill is a huge gift to the unions.

    Surprise.

  • Paul Marks

    The competitive position of the United States is awful – there are several reasons for this, for example the decline of American education (more and more money spent – but the schools teaching the wrong things, or teaching the right things in the wrong way), the ever increasing burden of regulations, and (yes) the endless fiat money that have pushed people into the finance economy (the mess that is Wall Street) rather than making things. And there is the special factor that the Dollar (being the “world reserve currency”) is absurdly overvalued – undermining exports and pushing imports.

    Which of these problems does the policy of the Biden Administration address? None of them – indeed it adds more regulations.

    As with looking at the United Kingdom, when one looks at the United States one sees societal decline – being reflected in relative economic decline.

  • Paul Marks

    Should the United States rely on its sworn enemies for basic goods? Of course not – but, like the United Kingdom, the United States appears to be in fundamental societal decloine.

  • Johnathan Pearce (London)

    No doubt that part of the fine print in the requirements for getting a subsidy will eventually include implementation of some specific features in chips or chipsets. Think cryptographic backdoors of varying kinds, mandatory functioning internet connection for operation of OS’s and communications apps, non-disablable GPS (or other locator) for all motherboards, and so on.

    Exactly, and of course, a reason for treating the products of these subsidized facilities with due care and attention.

  • Paul Marks

    Perhaps, if the United States broke up and the cancer that is the Federal Government was removed, some States (such as Texas and Florida) could reform themselves.

    But how could a State even the size of Texas survive in a world which would be dominated by the People’s Republic of China?

    The Federal Government (Wall Street as much as Washington D.C.) is institutionally corrupt – dependent on fiat money (for example 32 Trillion Dollars of official government debt – much more unofficially) and Credit Bubble banking. Its “Entitlements” (Social Security, Medicare, Medicaid, and so on) are unsupportable, and its vast web of regulations backs a handful of Corporations (giving them stranglehold on such things as FOOD processing) at the expense of everyone else.

    It is very hard to see how the Federal Government can be reformed – even if a President has good intentions (as, I would argue, Donald John Trump had good intentions) he is the helpless prisoner of a vast government machine that a President has little control over (somewhere Senator Conklin is saying “I warned that this situation might eventually develop”).

    Yet without the United States of America – how can States (even the size of Texas) survive in a hostile world – presently small countries can appeal for American backing, without the United States the world would be dominated by the People’s Republic of China.

    Johnathan Pearce – it is “Catch 22” – the world, including American States, needs the United States, but the United States Federal Government is a cancer (as is Wall Street – which is joined at the hip with the government via the institutionally corrupt monetary and financial system) and there appears to be no way to reform it.

    Again – Catch 22.

  • Paul Marks

    Look how President Trump was unable to prevent Covid lockdowns – even though he clearly did not want them.

    And look how he was unable to save Early Treatment for Covid, which could have saved most of the people who died, from being smeared and obstructed by the government-corporate machine (including the despicable, indeed murderous, “mainstream media”).

    The illusion of democracy (and, tragically, it did turn out to be an illusion) was horribly exposed.

    Not in every State, I accept that, but certainly at the level of the Federal Government.

    And it is not “just” Covid – it is many other things.

    The President would, for example, denounce Frankfurt School Marxist “Woke” doctrine – and the government machine, including the United States military, would carry on pushing it. As would the Corporations that are joined at the hip with government via the institutionally corrupt fiat money and Credit Bubble banking monetary and financial system.

    Perhaps, perhaps, a President who understood the government machine better (Ron DeSantos?) could be less of a “prisoner in a gilded cage – pulling leavers that are not attached to anything” – but with a vast govnment and corporate machine against you, what can any mere mortal man do?