Farfromgeneva wrote: ↑Tue Feb 28, 2023 9:02 am
Ugh, this is why I can be part of the Dems even if I reject 98% of my legacy Rep party these days. (NYT daily)
Social policy through semiconductors
When the bipartisan CHIPS Act passed last year to provide $52 billion to promote chip-building in America, trade experts hailed it as the most significant investment in industrial policy in a half-century.
But new disclosures about what companies must do to get the CHIPS money — including guaranteeing child care for workers and refraining from stock buybacks — show that the Biden administration is also keen on using federal dollars to reshape corporate America.
The CHIPS Act is increasingly about more than, well, chips. To be sure, the law is meant to revive America’s semiconductor industry by funding research and manufacturing in the U.S., reducing a reliance on foreign production for critical tech components. It’s also been described as a national security measure. (It’s worth noting that lawmakers from both parties have already questioned whether the already-profitable chip industry needs such funding.)
But there are strings attached to the money:
Those seeking $150 million or more must guarantee affordable, high-quality child care for plant workers. (Some of the federal subsidies can go toward meeting the requirement.) Commerce Secretary Gina Raimondo said this was a way to ensure women can stay in the work force.
Companies also need to share part of any unanticipated profits with the U.S., a move that federal officials said was meant to ensure accurate financial projections.
Preference for funding will go to companies that promise not to buy back stock. The requirement is rooted in growing Democratic opposition to a financial maneuver that critics say diverts money to Wall Street investors when it could be reinvested in the company.
It’s perhaps the White House’s broadest effort yet to use policy to influence business. While the U.S. government has attached conditions to federal funding in the past — the Biden administration already imposed tougher labor standards and “Buy American” provisions on the Inflation Reduction Act — this goes further.
Such moves are unlikely to please conservatives, who have accused the White House of pursuing progressive social goals through policy when it hasn’t been able to get them through Congress. “Rube Goldberg-ing new mandates into an expensive and misguided industrial policy is no way to make social policy,” Eric Boehm writes in Reason.
I assume you meant cannot, not "can"...
What aspect do you find particularly objectionable and why?
I didn't have an issue, for instance, with the Buy American provisions in the IRA bill.
The Dems, and particularly the moderate wing looking to rebuild support among working class voters not necessarily on the coasts, are looking for ways that move the needle in working class folks' lives. Especially younger working class families with children, making it easier for household formation and having children...
They'd largely ignored these folks, as had the GOP, for several decades...at least so far as substantive policy measures (child tax credit being an exception...but now gone). Here's an opportunity to not ignore...
These are big companies who could get a $150 million plus loan, not SMB's, so setting expectations about child care, or family leave, etc are not onerous, rather they are definitely doable efficiently. Lots of very large companies do these measures, at least to some degree...but not all do...however want our dough, then take care of your employees. And yes, we need to get women back into the workforce. (BTW, the family leave thing...which doesn't appear to have been included, is very much a dad thing too when its "parental" not merely maternal...there's actually a bi-partisan effort brewing to get this sort of thing done for dads.)
No stock buybacks? Heck, makes a ton of sense to me...we've seen money flow from Washington to companies to shareholders, ignoring reinvestment much less workers...that's not the objective of this program.
I'd need to see the "excess profits" calculation, as that sounds problematic, but in principle I can see why they'd be saying they want to share in any unexpected windfall returns...I think we should be thinking that way about all sorts of government risk funding, eg tech risk, Pharma, etc...
We have a "massive spy ring in America".
