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.
Nestlé announced Monday that it has eliminated artificial colors from all of its food
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
Brooklyn Coffee Shop Faces Firestorm After Publicly Shaming, Banning Congressman Over Pro-Israel Views
The Data Center Did Not Raise Your Power Bill. Ironically, More Demand Makes Electricity Cheaper.
Report Analyzes Qatar Funding For Islamic And Arabic Studies In US Schools
Why Was A Would-Be Trump Assassin Carrying A Remote Device With An Antenna?
SECURITY
Iran War Powers Resolution Clears Senate With Bipartisan Support
WASHINGTON — The Senate approved a House-passed war powers resolution Tuesday aimed at blocking
Downed US Pilot Described Iranian Drones Flying In ‘Jellyfish’ Formation Before Crash
A U.S. F-15E pilot shot down over Iran in April told intelligence officials he
New Trump Appointee Starts Mass Firings At Intelligence Agency: Report
Large-scale personnel cuts are now underway at the Office of the Director of National
Iran Announces Closure Of Strait Of Hormuz Following Israeli Strikes In Lebanon
TEHRAN — Iran announced Saturday that it is closing the Strait of Hormuz, accusing
FOREIGN AFFAIRS
Iran War Powers Resolution Clears Senate With Bipartisan Support
WASHINGTON — The Senate approved a House-passed war powers resolution Tuesday aimed at blocking
Brooklyn Coffee Shop Faces Firestorm After Publicly Shaming, Banning Congressman Over Pro-Israel Views
A radical Brooklyn coffee shop is facing growing backlash after publicly humiliating Rep. Dan
Man Accused Of Throwing Toddler Into Crocodile Enclosure Released On Bail In UK Zoo Attack Case
Police Say Suspect Was Not Known to Child and Was Deemed Unfit for Interview
Britain’s Prime Minister Resigns After Dramatic Collapse In Support
LONDON — British Prime Minister Keir Starmer announced his resignation Monday, ending a turbulent
BUSINESS & ECONOMICS
Former Federal Reserve Chief Alan Greenspan Dead At 100
Alan Greenspan, the influential economist who led the Federal Reserve through nearly two decades
The Awkward Truth Behind Matt Walsh’s Data Center Claim
Imagine a tenant who signs a lease everyone agrees is temporary, then asks the
Minority Contractors Say Obama Center Project Left Them On The Brink
Several minority-owned contractors and subcontractors involved in building the $850 million Obama Presidential Center
Trump Threatens 100% Tariff On French Wine Over Digital Tax Dispute
President Donald Trump has warned France that it could face a fresh trade battle
HEALTH & SCIENCE
Josh Shapiro Embraces ‘Medical Freedom’ Rhetoric As 2028 Speculation Grows
Pennsylvania Gov. Josh Shapiro is drawing attention for comments that appeared to echo one
Democrats Want Taxpayers To Fund Gun Control Advocacy Through The CDC
By Matt Manda Shooting News Weekly U.S. Rep. Valerie Foushee (D-N.C.) introduced legislation that would put the
VA Eliminates LGBTQ Programs Under New Trump-Era Directive
WASHINGTON — The Department of Veterans Affairs is ordering healthcare facilities nationwide to eliminate
Nestlé Says It Has Removed Artificial Colors From All American Food & Beverage Products
Nestlé announced Monday that it has eliminated artificial colors from all of its food
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