Continuing on the theme of corporate welfare and industrial policy, one of the more recent additions to the federal dole is the once-dominant semiconductor maker Intel.
The company’s most recent earnings report disappointed investors, as the company disclosed that its manufacturing business lost $7 billion last year.
That’s real money. But don’t weep for Intel. Thanks to the federal government, it’s going to get billions of taxpayer dollars to expand its chip making business in the U.S. Job, creativity, prosperity, national security, and a pony in every paddock are sure to follow.
Except corporate welfare does strange things to companies. It makes them less competitive, less innovative. And above all, it makes them more dependent of the feds for even bigger contracts, protection, and subsides. As the Wall Street Journal writes of Intel:
All told, Intel could pocket some $50 billion in federal subsidies. Yet Mr. Gelsinger wants more. American chip manufacturing “doesn’t get fixed in one three- to five-year program,” the CEO said last month. “I do think we’ll need at least a CHIPS 2 to finish that job.”
But that’s not all the taxpayer cash the company is pocketing…nor is it all the troubles it faces:
Earlier this year Intel said it is delaying work on its Ohio plant owing to “business conditions” and “market dynamics.” The factory—which is also getting up to $2 billion in state subsidies—now isn’t expected to be operational until 2027 or 2028, two to three years later than projected.
All the more time to push for that next round of subsidies.
But a more useful outlet for all that lobbying, and for industrial policy/corporate welfare advocates in general would be to re-evaluate their assumptions. Failing that, they could go to first (economic) principles. There, they will run smack into an iron rule of economics, neatly summarized in this 1993 St. Louis Federal Reserve Bank paper:
To work, the benefits and the costs of any [industrial] policy must be identified and measured correctly. Each subsidy given to an industry or firm generates an opportunity cost: the cost of foregone alternatives. In other words, to correctly evaluate a policy, you need to know not only what you’re getting, but also what you’re giving up. Based on industrial policy experiments in several countries, most economists have little confidence in the government’s ability to measure these benefits and costs properly.[emphasis added]
Or looked at historically, we have Bastiat’s story of the broken window – or, what is seen and what is not seen.
Politicians and corporate C-Suite occupants see the activity subsides can produce – factories employing people making the latest gadgets. What cannot be seen is what the people paying for those subsidies – taxpayers of all shapes and sizes – could have done if the state had not taken their money and given in to someone else.
Those costs cannot be tallied, but they are real opportunity costs. Corporate welfare recipients and the welfare hustlers who supply them won’t admit there are such things as opportunity costs. How can pols create photo-ops and nifty talking points on activity people do on their own…and how would they possibly take credit for it?
The opinions expressed in this article are those of the author and do not necessarily reflect the positions of American Liberty News.
Norman Leahy has written about national and Virginia politics for more than 30 years with outlets ranging from The Washington Post to BearingDrift.com. A consulting writer, editor, recovering think tank executive and campaign operative, Norman lives in Virginia.
Norman Leahy has written about national and Virginia politics for more than 30 years with outlets ranging from The Washington Post to BearingDrift.com. A consulting writer, editor, recovering think tank executive and campaign operative, Norman lives in Virginia.
Texas Gov. Greg Abbott has ordered a state investigation into a South Texas hospital
At American Liberty News, we eschew the mainstream media’s tightly controlled narrative to provide our readers with real news, real insights, and the means to take action. We seek out insightful coverage – and partner with knowledgeable and experienced people and organizations to bring you the information and insight our readers demand.
We humbly seek to provide the tools and information necessary for our readers to decide for themselves what is true and what is right.
Federal Government Bails Out Another Industry
Continuing on the theme of corporate welfare and industrial policy, one of the more recent additions to the federal dole is the once-dominant semiconductor maker Intel.
The company’s most recent earnings report disappointed investors, as the company disclosed that its manufacturing business lost $7 billion last year.
That’s real money. But don’t weep for Intel. Thanks to the federal government, it’s going to get billions of taxpayer dollars to expand its chip making business in the U.S. Job, creativity, prosperity, national security, and a pony in every paddock are sure to follow.
Except corporate welfare does strange things to companies. It makes them less competitive, less innovative. And above all, it makes them more dependent of the feds for even bigger contracts, protection, and subsides. As the Wall Street Journal writes of Intel:
But that’s not all the taxpayer cash the company is pocketing…nor is it all the troubles it faces:
All the more time to push for that next round of subsidies.
But a more useful outlet for all that lobbying, and for industrial policy/corporate welfare advocates in general would be to re-evaluate their assumptions. Failing that, they could go to first (economic) principles. There, they will run smack into an iron rule of economics, neatly summarized in this 1993 St. Louis Federal Reserve Bank paper:
Or looked at historically, we have Bastiat’s story of the broken window – or, what is seen and what is not seen.
Politicians and corporate C-Suite occupants see the activity subsides can produce – factories employing people making the latest gadgets. What cannot be seen is what the people paying for those subsidies – taxpayers of all shapes and sizes – could have done if the state had not taken their money and given in to someone else.
Those costs cannot be tallied, but they are real opportunity costs. Corporate welfare recipients and the welfare hustlers who supply them won’t admit there are such things as opportunity costs. How can pols create photo-ops and nifty talking points on activity people do on their own…and how would they possibly take credit for it?
The opinions expressed in this article are those of the author and do not necessarily reflect the positions of American Liberty News.
READ NEXT: Think Tank Scholar Exposes Washington Hypocrites
Norman Leahy
Norman Leahy has written about national and Virginia politics for more than 30 years with outlets ranging from The Washington Post to BearingDrift.com. A consulting writer, editor, recovering think tank executive and campaign operative, Norman lives in Virginia.
Norman Leahy
Norman Leahy has written about national and Virginia politics for more than 30 years with outlets ranging from The Washington Post to BearingDrift.com. A consulting writer, editor, recovering think tank executive and campaign operative, Norman lives in Virginia.
Search
follow us
subscribe
TRENDING STORIES
The Establishment Is Trying To Kill The Closed Primary And Gov. Abbott Is Letting Them Do It
Wisconsin Woman Hits Union Bosses With Federal Charges Over Alleged Forced Dues
Europe’s Unelected Machinery Overruled Its Own Parliament Twice In One Morning Last Week
The Texas Two-Step: How Trump Is Dealing With Senate Obstruction
SECURITY
Trump Reimposes Naval Blockade Of Iran, Escalating Showdown
President Donald Trump announced Monday that the United States is reimposing its naval blockade
Trump Shares Instructions For Military In Event Of His Assassination By Iran
President Donald Trump said he has left instructions for the United States to launch an
Fox’s Kilmeade Says Trump Should Replace Kushner, Witkoff In Iran Talks
Fox News host Brian Kilmeade is urging President Donald Trump to overhaul his negotiating
Trump Declares Iran Ceasefire ‘Over’ After US Strikes 90 Military Targets, Gulf Tensions Explode
WASHINGTON — The three-month ceasefire between the United States and Iran has seemingly collapsed
FOREIGN AFFAIRS
Trump Reimposes Naval Blockade Of Iran, Escalating Showdown
President Donald Trump announced Monday that the United States is reimposing its naval blockade
Christian Parents Rally In Washington After Sweden Keeps Daughters For More Than Three Years
More than three years after Swedish authorities removed two young girls from their Christian
Congressman Detained By Armed Israeli Settlers In West Bank Standoff
Rep. Ro Khanna (D-Calif.) says he and a congressional delegation were briefly detained by
Violence Flares Near Historic Christian Community In The West Bank
A Christian advocacy group is sounding the alarm after reporting that a West Bank
BUSINESS & ECONOMICS
Xbox CEO’s Federal Reserve Appointment Sparks Backlash Following Microsoft Layoffs
The Federal Reserve is facing criticism after appointing Xbox CEO Asha Sharma to a
The AI Jobs Apocalypse Just Failed Its First Contact With The Evidence
Imagine a chief executive standing before his investors after a bruising quarter. He overhired
Trump Orders Immediate Halt to Trade With Spain Over NATO Dispute
President Donald Trump dramatically escalated his pressure campaign against NATO allies on Wednesday by
Trump Backs New ‘Freedom Fuel’ Gas Stations
The White House is promoting a new “Freedom Fuel Network” of gas stations offering
HEALTH & SCIENCE
McMaster Appoints Lindsey Graham’s Sister To Finish His Senate Term
South Carolina Gov. Henry McMaster has appointed Darline Graham Nordone, the sister of the
Mitch McConnell’s Photo Triggers Fresh Questions, ‘Proof Of Life’ Demands From MAGA Critics
Sen. Mitch McConnell’s first photograph since his weeks-long hospitalization has done little to quiet
Senator Lindsey Graham Passes Away Suddenly At 71
Sen. Lindsey Graham (R-S.C.) has died at the age of 71 following what his
Texas Gov. Greg Abbott Orders Investigation Into Hospital Over Alleged Birth Tourism Advertising
Texas Gov. Greg Abbott has ordered a state investigation into a South Texas hospital
At American Liberty News, we eschew the mainstream media’s tightly controlled narrative to provide our readers with real news, real insights, and the means to take action. We seek out insightful coverage – and partner with knowledgeable and experienced people and organizations to bring you the information and insight our readers demand.
We humbly seek to provide the tools and information necessary for our readers to decide for themselves what is true and what is right.
TOP TAGS
TOP CATEGORIES
FEATURES
American Liberty News ©2024
Evolution Digital Media
1900 Reston Metro Plz
Suite 600
Reston, VA 20190