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Mussolini named it, American has long been doing it: Fascism, is the merger of state and corporate powers.
The House of Representatives sent a bill to President Joe Biden’s desk last week that will earmark billions in financial assistance for U.S. companies to create domestic semiconductor facilities to counter China’s growth in the industry.
The bill comes with a $280 billion price tag that will include subsidies and other tax breaks for these companies. Republicans were opposed to the bill and called it the equivalent of corporate welfare. The Wall Street Journal, citing an estimate, reported that China intends to spend about $150 billion through 2030 to assist its industry and other Asian countries have been assisting their semiconductor companies for decades.
Peter Hanbury, a partner with expertise in tech supply chains at Bain & Co., told the paper that the U.S. is in a “race to subsidize semiconductor manufacturing.”
TRENDPOST: The Trends Journal has detailed the worldwide shortage of computer chips and its impact in such stories as “Global Chip Shortage to Cost Auto Makers $210 Billion This Year” (5 Oct 2021), “Global Chip Shortage Slashes Economic Outlook” (2 Nov 2021) and “Semiconductor Stocks Riding High on Chip Shortage” (23 Nov 2021).
This century, computer chip manufacturing has migrated to lower-cost countries, leaving developed economies vulnerable to the kinds of supply disruptions the COVID War exposed. We have identified “Self-Sufficiency” as a TOP TREND in 2022.
The trend toward self-sufficiency will see companies and countries cultivating not only domestic chip supplies, but also homegrown capabilities across a range of critical industries, such as steel-making and electronics manufacturing.
Proponents of the bill say it helps even the playing field since it can cost U.S. companies about 30 percent more than Taiwan or South Korea to produce these chips, the WSJ reported.
The Bill
The Chips and Science Act of 2022 comes with $52.7 billion for the construction of these facilities, which can cost tens of billions of dollars to erect. The bill also includes $24 billion in tax incentives and another $39 billion for semiconductor manufacturing.
Biden praised the bill in a statement and said it will lower costs and create jobs. The vote cleared the House in a 243-187 vote.
“By making more semiconductors in the United States, this bill will increase domestic manufacturing and lower costs for families,” Biden said in a statement. “And, it will strengthen our national security by making us less dependent on foreign sources of semiconductors.”
We reported earlier this year that Intel announced plans to invest more than $20 billion to build two new chip-making plants near Columbus, Ohio, with the possible investment growing to $100 billion and eight plants over the next ten years. (See “INTEL FOLLOWS ONE OF OUR TOP 10 TRENDS: SELF SUFFICIENCY.”)
About $11 billion will go towards research and training and $2 billion will fund quick data transfers to the military, the paper said.
The bill passed the Senate. Sen. Bernie Sanders, I-Vt., came out against the bill.
“The question we should be asking is this: should American taxpayers provide the microchip industry with a blank check of over $76 billion at a time when semiconductor companies are making tens of billions of dollars in profits and paying their executives exorbitant compensation packages? I think the answer to that question should be a resounding no,” Sanders said on the Senate floor.
TRENDPOST: Once again, the U.S. finds itself playing catch-up to China. The New York Times reported last week that Beijing was able to apparently leapfrog the U.S. when it comes to semiconductors that include circuits “about 10,000 times thinner than a human hair” and rival those made in Taiwan, which is known as an industry leader.
The Trends Journal has long noted that China’s business is business, while the U.S.’s business is war. (See: “TOP TRENDS 2021: THE RISE OF CHINA,” and “DUH! PENTAGON SURPRISED BY CHINA’S TEST OF HYPERSONIC MISSILE.”)
We have noted that both China’s manufacturing abilities and tech innovation were at third world levels before Bill Clinton and George W. Bush brought the communist nation into the World Trade Organization at the turn of the century.
It was U.S. and European companies that exported their manufacturing facilities and high technology to China so they could use its cheap labor to make their products… and sell them back to the citizens around the world at much higher prices so they could boost their profit margins.
Thus, with the U.S. workforce having slid into the service sector economy—working at Walmarts, janitorial jobs, hospitality sector, restaurant workers, packing and shipping for Amazon, stocking shelves and cashiers at Dollar General, Kroger’s etc.—what was once a nation of manufacturing innovation and creativity has descended into Slavelandia. (Read “SLAVELANDIA: RICH GET RICHER, POOR GET POORER.” 13 Oct 2020.)
As we have long forecast, the only way the United States—which is rich in natural and human resources—will halt its economic decline is to become a self-sustaining economy.
The Times said the Biden administration has worked to keep key equipment away from China when it comes to these semiconductors “because progress in chip manufacturing is now scrutinized as a way to define national power—much the same way nuclear tests or precision-guided missiles were during a previous cold war.”
TREND FORECAST: Barely a mention by the mainstream media of why and how American companies left the U.S. manufacturing base and went to cheap labor nations to make what they needed as the U.S. middle class shrunk.
Nothing about NAFTA and bringing China into the World Trade Organization that had companies take government money and eliminate high paying manufacturing jobs that were sent overseas… while selling the crap that the Americans would be better off as a “service sector” economy.
This bill, as with most Federal, state and local legislation, is more tax breaks and funding for the Bigs and lower wages and more poverty for the plantation workers of Slavelandia.