Here’s a letter to the Wall Street Journal:
William Galston celebrates the Congressional bipartisanship now producing, among other pieces of legislation, subsidies to American producers of semiconductors (“Surprise: A Divided Congress Is Making Bipartisan Progress,” July 26). He should hold his applause.
First, contrary to Mr. Galston’s naïve suggestion, Democrats aren’t supporting these subsidies to private businesses out of a sense of patriotic duty. Instead, they’re doling out corporate welfare, a well-rehearsed practice that conjures political support for politicians doing the doling regardless of party.
Second, Mr. Galston mistakenly assumes that subsidies are necessary to spur investment in semiconductor production. In reality, as noted recently by Scott Lincicome and Alfredo Carrillo Obregon,
there has been even more chipmaking investment dedicated to the U.S. market, even as federal subsidies have languished. Construction is now underway at four major U.S. facilities and will continue with or without subsidies – something even Intel reluctantly acknowledged when it delayed the groundbreaking ceremony on its much‐ballyhooed Ohio facility to protest congressional inaction. This is because, as numerous experts have explained over the last year, there are real economic and geopolitical reasons to invest in additional U.S. semiconductor production – no federal subsidies needed.*
Bipartisanship in this case is politically opportunistic cooperation across the aisle to loot taxpayers for the benefit of politically powerful producers.
Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030
* Scott Lincicome and Alfredo Carrillo Obregon, “Politics, Not Economics, Motivates Semiconductor Subsidies,” Cato@Liberty, July 20, 2022.