One of the Biden administration's major policy accomplishments was a bipartisan affair: the so-called CHIPS Act, which will transfer roughly $39 billion worth of taxpayer dollars to semiconductor chip makers in the form of loans and grants so they can build chip manufacturing plants right here in the USA.
It's a massive corporate welfare program, and neither our resident political class, nor the alleged steely-eyed capitalists running the chip makers has any qualms about going on Uncle Sam's payroll.
A funny and horrifying thing about all of this how politicians also tout the huge number of good jobs at good wages all these wealth transfers are supposedly creating.
Yeah. About those jobs. As Reason's Eric Boehm writes, each one of them is costing taxpayers a very pretty penny:
In a statement, the White House said the subsidies would include $8.5 billion in direct grants to [chip manufacturer] Intel, which will also have access to $11 billion in federal loans. For all that money, Intel is expected to create 30,000 jobs.
In other words, taxpayers will pony up over $283,000 per job created—and that's counting only the $8.5 billion in direct payments to the company.
The math gets even worse if you read Intel's press release, which clarifies that 20,000 of those 30,000 new jobs will be temporary construction jobs connected to building new facilities in four states.
That's…astounding. But it's also completely on-brand for economic development/corporate welfare deals everywhere in the country. Billions are given to otherwise healthy, profitable, growing companies to do what they already plan to do. Except now, someone gets to pay for it (and take any downside risk).
And just in case the political angle gets lost…Intel is building chip plants in two critical election year states: Arizona and Ohio (plus Oregon and New Mexico).
What are we to make of all this? It's a classic mixture of everything that can and will go badly wrong when the state uses the public purse to meddle in the private sector. Government officials get to play Santa Claus, corporations get subsidies for actions they were already going to take, and taxpayers get the bill.
It's a version of Frederic Bastiat's warning against legal plunder:
Man can live and satisfy his wants only by ceaseless labor; by the ceaseless application of his faculties to natural resources. This process is the origin of property.
But it is also true that a man may live and satisfy his wants by seizing and consuming the products of the labor of others. This process is the origin of plunder.
Now since man is naturally inclined to avoid pain–and since labor is pain in itself–it follows that men will resort to plunder whenever plunder is easier than work.
And so we bid welcome to the new class of corporate welfare queens and their bipartisan political enablers. They will be sending you the bill.
The opinions expressed in this article are those of the author and do not necessarily reflect the positions of American Liberty News.
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