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What would be a good way?
Have the DOD force its suppliers to make their things in the US? Only allow them to import raw materials or low value manufactured elements. Just throwing ideas, might not be practical...
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Alternatively, you add a 20% tax on CPUs made outside the US. That would incentivize the fans manufactured in the US even if it’s a foreign company.
Or, chips just become 20% more expensive in the US and the consumer loses... and the US still doesn't gain supply chain security. I don't think tariffs will work when the alternative requires massive outlay of capital and decades to recoup. Not to mention, there is no reality where manufacturing these chips in the US costs less than Taiwan, for example. There is no reason to build a fab in the US with the current eco…
The chicken tax, as been an incredibly efficient way to assure that car's are manufactured in the USA, so much so that the cost difference between a Ford manufactured in Mexico and a Toyota manufactured in TX is basically 0.
I disagree that subsidizing R&D to a few companies is going to make us more competitive. Look at GE or Boeing, it didn’t work out. What works is a free market. Raise import costs on CPUs and you’ll incentivize building in the US and more companies to form. It costs $0 tax dollars and brings in revenue and high paying jobs. Similar to what we did with car manufacturing.
I disagree that subsidizing R&D to a few companies is going to make us more competitive. Look at GE or Boeing, it didn’t work out. What works is a free market. Raise import costs on CPUs and you’ll incentivize building in the US and more companies to form. It costs $0 tax dollars and brings in revenue and high paying jobs. Similar to what we did with car manufacturing.
If anything, the more something resembles a "free market", the worse it is - you don't think Intel wouldn't poison the water supply if it juiced the Q4 earnings?
It's always more economical to just dump the toxic waste into the local river. If anything these subsidies even the playing field for people who don't think that's a good idea.
I disagree that subsidizing R&D to a few companies is going to make us more competitive. Look at GE or Boeing, it didn’t work out. What works is a free market. Raise import costs on CPUs and you’ll incentivize building in the US and more companies to form. It costs $0 tax dollars and brings in revenue and high paying jobs. Similar to what we did with car manufacturing.
"What works is a free market. Raise import costs on CPUs and you’ll incentivize building in the US and more companies to form." Is the market really free with tariffs?
The US federal government was initially only able to make revenue from tariffs. Basically you control the borders, but inside the borders there are no control (ie free market). Once you deal between nations, you cannot have a perfectly free market, else your enemies will eat you. Which imo is what happened the last 50 years.
WaPo article, which has more details about the bill and less details about what different “personalities” are saying: https://www.washingtonpost.com/politics/2022/07/27/senate-ch... . Overall, it looks great. We absolutely need to fund more semiconductor manufacturing. Losing that ability to China/Taiwan was just a terrible strategic mistake. The US hasn’t lost this battle (over semiconductors) just yet. While curren…
What are these? Can you quote them?
Pompeo could qualify I suppose? Though he was Secretary of State, which seems to be more than a "personality".
The rest of the "details" are about the opinions of congressmen, not "personalities".
I disagree that subsidizing R&D to a few companies is going to make us more competitive. Look at GE or Boeing, it didn’t work out. What works is a free market. Raise import costs on CPUs and you’ll incentivize building in the US and more companies to form. It costs $0 tax dollars and brings in revenue and high paying jobs. Similar to what we did with car manufacturing.
Can you imagine a world where US airlines had to depend on either Airbus or Sukhoi planes? Do you really think that would be better?
If it moves, tax it. If it keeps on moving, regulate it. If it stops moving, subsidize it. - Ronald Reagan
Look at your iPhone. That touch screen, GPS, the internet, voice-assistant AI, etc. It's all a collection of government technologies. Economist Mariana Mazzucato has written[0] about the myth of private sector innovation in depth. Even the industrial revolution was driven through purposeful government investment.
Another economist, Ha-Joon Chang, has written[1] extensively about this as well. The same tools the US used to build itself up (subsidization, tariffs, gov't programs, etc) are the first things that the US (through World Bank and IMF) bans with "structural adjustment" policies when these countries inevitably can't pay back the loan that was shoved down their throats. They "liberate" the economy. In other words remove any local protections from competition by US companies that are themselves heavily subsidized. And also get rid of any government services and leave it up to the "free market"
The thing is that this is just the way anything gets done. Just look at Walmart.[2] Internally, it's the largest planned economy ever invented. Many magnitudes larger than the Soviet Union ever was. Anybody who's sold a product at Walmart stores knows that once you make the deal you've basically given up all control to them. They decide what gets produced in what factories and when and how much
Contrast that with something like Sears that tried the "free market" approach internally. They let their stores compete with each other and tried to have minimal centralized intervention in what each store does. Sears failed... And so did their Ayn Rand-obsessed CEO.
[0] https://marianamazzucato.com/books/the-entrepreneurial-state
[1] https://anthempress.com/kicking-away-the-ladder-pb
[2] https://www.versobooks.com/books/2822-the-people-s-republic-...
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Or, chips just become 20% more expensive in the US and the consumer loses... and the US still doesn't gain supply chain security. I don't think tariffs will work when the alternative requires massive outlay of capital and decades to recoup. Not to mention, there is no reality where manufacturing these chips in the US costs less than Taiwan, for example. There is no reason to build a fab in the US with the current eco…
I think in this case the US is different than say Chile because its such a large market. AKA its large enough to support home grown manufacturing if the incentives aren't out of wack. The chicken tax, as been an incredibly efficient way to assure that car's are manufactured in the USA, so much so that the cost difference between a Ford manufactured in Mexico and a Toyota manufactured in TX is basically 0.
There is no reality where manufacturing a car in Mexico costs the same as in Michigan. We've artificially increased the cost of the Mexico product... that is what will happen if you try that approach with chips - they will be more expensive for no real good reason.
It also appears to cost many multiples more capital to build a chip fab than a car plant according to these sources[1][2].
[1] https://www.exacthowmuch.com/how-much-does-it-cost-to-build-...
[2] https://builtin.com/hardware/american-made-semiconductor-cos...
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Clearly, handouts are needed to force/incentivize these companies to build new fabs in the continental US. Otherwise they would have built them under their own gumption by now. When there is no clear benefit for the company to fab chips in the continental US, and a lot of clear negatives (cost, regulations, etc) - you have to do something to outweigh the cons. If the US had been an amazing place to fab chips already,…
Alternatively, you add a 20% tax on CPUs made outside the US. That would incentivize the fans manufactured in the US even if it’s a foreign company.