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Prompted by the bi-partisan support in Congress for subsidizing U.S.-based producers of semiconductors, the Editorial Board of the Wall Street Journal decries the now-fashionable practice of using China’s self-destructive economic policies as an excuse for U.S. corporate welfare that is sold by its supporters as “industrial policy.” Three slices:

Industrial policy is back in fashion in Washington, or as it ought to be called, corporate welfare. The semiconductor industry is first in the queue, but it won’t be the last. Taxpayers should at least know they’ll be subsidizing highly profitable companies that don’t need the help and might end up regretting the political handcuffs they’re acquiring.

The bill that will head to the Senate floor as early as Tuesday includes $52.2 billion in grants to the computer chip industry. But wait, there’s more. Congress is also offering a 25% tax credit for semiconductor fabrication, which is estimated to cost about $24 billion over five years. That’s $76 billion for one industry.


The other claim for the bill is that the U.S. must subsidize domestic chip-making to compete with China, but this also isn’t persuasive. The companies like to point out that the U.S. share of the world’s chips has fallen to 12% from 37% in 1990. They don’t mention that the U.S. leads in chip design (52%) and chip-making equipment (50%). Seven of the world’s 10 largest semiconductor companies are based in the U.S. China trails American companies by years in semiconductor technology.


History shows that easy government money can undermine competitiveness. It often leads to inefficient spending and investment. The politicians will also attach their own strings, perhaps with limits on stock buybacks and dividends. Wait until Bernie Sanders is heard from on the Senate floor.

The chip bill isn’t needed to compete with China, and it will set a precedent that other industries will follow. Anybody who can throw up a China competition angle will ask for money. Why Republicans want to sign up for this is a mystery, especially when they might control both houses of Congress in six months.

I’m always pleased and honored to be a guest, as I was yesterday, of Amy Jacobson and Dan Proft on their “Chicago’s Morning Answer” radio show.

Peggy Little applauds the U.S. Supreme Court ruling in West Virginia v. EPA. A slice:

The majority recognized that EPA’s seizure of life and death control over the power plants of America is “eyebrow raising,” invoking a well-established line of precedent which rejects such self-conferred expansions of agency power. For example, in 2000, the FDA could not self-assert power to regulate tobacco. More recently, the Court ruled that the Centers for Disease Control had been given no power by Congress to regulate state housing policy and invalidated CDC’s shocking nationwide shutdown of state court evictions. The Court must enforce these guardrails, or our polity will be at the mercy of bureaucrats gone wild, as our national experience of the plague years vividly demonstrated, at incalculable and continuing cost to Americans.

Writing in the Wall Street Journal, Hal Scott and John Gulliver justly criticize U.S. Securities and Exchange Commission chairman Gary Gensler’s assault on capital markets. A slice:

Mr. Gensler has also signaled interest in restricting the ability of retail brokers to receive payments from wholesale brokers that handle orders, a system known as “payment for order flow.” The SEC would substitute an entirely new and untested system of auctions for retail orders. The new process would likely result in the return of brokerage commissions, which served as a barrier to young and low-income investors’ entry into the stock market. Mr. Gensler has also stated that the SEC may soon mandate disclosures of corporate board diversity. And former Commissioner Allison Lee has suggested that the SEC may limit the ability of private companies to raise capital from private-equity and venture-capital funds by effectively reducing the number of investors in private companies—a matter now on its official agenda.

What can be done to save capital markets from this assault? Congress should exercise its oversight authority over the SEC by demanding that Mr. Gensler halt his high-speed regulatory attack until the commission evaluates the overall impact of its proposals on U.S. capital markets. A recent release by the Committee on Capital Markets Regulation shows that, while 11 SEC proposals apply to public companies and 10 apply to mutual funds, the SEC has failed to evaluate the overall burden and overlapping requirements of these proposals on these companies or funds.

“Researchers gave cash to low-income people. It led them to spend more and work less.” – so reports Wall Street Journal columnist Allysia Finley. Two slices:

Did pandemic stimulus payments harm lower-income Americans? That’s the implication of a new study by social scientists at Harvard and the University of Exeter.

Liberals [DBx: Progressives] argue that no-strings-attached handouts encourage better financial decisions and healthier lifestyles. The theory is that low-income folks become more future-oriented if they’re less stressed about making ends meet. The Harvard study put this hypothesis to the test and found the opposite.


More plausible, the payments made work less rewarding, which reduced feelings of personal well-being. Cash recipients reported less earned income and felt worse about their work. It’s no surprise that people who received a large percentage of their monthly income for doing nothing were less motivated to work and less satisfied with their work. Earning a paycheck can give workers a sense of personal agency that encourages them to make better financial and health decisions. Receiving a handout may do the opposite.

(DBx: Until I breathe my final breath I’ll continue the admittedly quixotic quest to help restore the word “liberal” to its true meaning. There is precious little that is liberal – and much that is arrogant, intolerant, and authoritarian – about the Progressives and statists who today in the United States are so very misleadingly called “liberal.”)

Cafe Hayek’s Quotation of the Day of exactly one year ago – a quotation from Lon Fuller – deserves another read.

Brendan O’Neill writes about Britain that “[t]he heatwave green hysteria is out of control.”

Eric Boehm reports that tariffs make Summer fun more expensive and less safe. Here’s his conclusion:

Tariffs on pool fencing and bike helmets make about as much sense as the tariffs on personal protective equipment that left American hospitals less prepared, in winter 2020, to combat the COVID-19 pandemic. They’re also a useful illustration of how both Trump and Biden trade policies could actively harm Americans in ways that go beyond higher prices.

Jeffrey Tucker exposes the culpability of the New York Times in stirring up unjustified covid hysteria. A slice:

Over two years, the pattern at the Times has been the same:

  • Attribute terrible economic, educational, and cultural fallout not to the lockdowns but to the virus;
  • Attribute virus fallout to the failure not to lock down and mandate enough;
  • Deliberately confuse readers about the difference between tests, cases, and deaths, while obscuring any downside to mass mandated vaccinations;
  • Never focus on the incredibly obvious demographics of C19 death: average age of expected death with underlying conditions;
  • Ignore completely the primary victims of lockdowns: especially small businesses, the poor and minority groups, marginalized communities, artists, immigrant communities, small towns, small theaters, and so on;
  • Do not publish anything that speaks of the path that all civilized countries prior dealt with new viruses: the vulnerable protect themselves while everyone else gets exposed with resulting immunity (Sweden did as well as any country because it refused to violate human rights, while lockdowns everywhere else flopped);
  • Dismiss any alternative to lockdown as crazy, unscientific, and cruel, while acting as if Fauci speaks for the whole of the scientific community;
  • Presume without evidence that all the interventions work in principle, including masks and travel and capacity restrictions;
  • Put down and disparage repurposed therapeutics as if the evidence of their effectiveness did not exist.
  • Never raise doubts about vaccine effectiveness, much less harms, while ignoring the carnage of the mandates on poor communities and labor markets as hundreds of thousands are fired.

(DBx: It should be added that a refreshing exception to the NYT‘s mostly appalling reporting and opining on covid is that paper’s columnist David Leonhardt, who often pushed back – for example, here – against at least some covid misinformation.)

Writing in the Telegraph, Sunetra Gupta – one of the three co-authors of the great Great Barrington Declaration – expresses her worry that an inquiry in Britain into that country’s covid response will fail to find the right answers. A slice:

In deciding whether the UK’s response to the pandemic was appropriate, the most important question to consider is not whether the Government locked down the country at precisely the right moment, but rather whether lockdowns and other restrictive measures were justified at all, given the uncertainties that existed at the time concerning their efficacy in containing the spread of SARS-CoV-2 and the negative knock-on effects on the health and wellbeing of the population.

We now know that many of the measures imposed during the pandemic did not have a significant effect on reducing the spread of the virus and led to an entirely predictable set of concerning outcomes of extraordinary proportions among the most vulnerable sectors – children, the elderly, and the economically deprived.

This is because, as any standard epidemiology text will tell you, measures restricting activity are unlikely to stall the spread of a novel virus in the long term. Such interventions, however, will alter the dynamics of endemic diseases (such as RSV, influenza, adenovirus) causing them to transiently disappear and subsequently re-emerge at unusual times with some attendant perverse consequences.

Russ Roberts talks with Vinay Prasad about covid, covid vaccines, and covid policy.