I could bore you once again with all the reasons why industrial policy/central planning doesn’t usually work as planned. But instead, I will just point you to these articles.
The first one reports that instead of trying to address the cost of child care by lifting the many idiotic rules (some federal and many state and local) that constrain supply and jack up the price, the Biden administration is going to tell companies that if they want to be able to get some of the $39 billion in semiconductor subsidies, they will have to provide “high quality” child care:
Companies that receive the subsidies to build new plants will be able to use some of the government money to meet the new child care requirement. They could do that in a number of ways, in consultation with Commerce officials, who will set basic guidelines but not dictate how companies ensure workers have access to care they can afford.
That could include building company child-care centers near construction sites or new plants, paying local child-care providers to add capacity at an affordable cost for workers, directly subsidizing workers’ care costs or other, similar steps that would ensure workers have access to care for their children.
I wonder how legislators who voted for chip subsidies will feel about some of the money going to pay for building child-care centers, especially those who actually believed the fiction that this massive crony subsidy bill was essential to help the U.S. compete with China.
And then there is this article on the same issue with this little surprise:
Those projects [that benefit from the subsidies] will also be required to share a portion of any unanticipated profits with the federal government. Companies applying for awards will be required to submit detailed financial projections, with the federal government entitled to share in any “upside” profits. The Commerce Department depicted that requirement as a way to encourage companies to make their projections as accurate as possible, and not exaggerate any losses to try to secure more funding.
As Scott Lincicome joked on Twitter, “Now, they are trolling us.” It’s as if they are going down a list called “Self-sabotaging your industrial policy 101.”
We will call this the Biden way:
The requirements will join a growing list of administration efforts to expand the reach of President Biden’s economic policies beyond their primary intent. For instance, administration officials have attached stringent labor standards and “Buy American” provisions to money from a bipartisan infrastructure law.
Now, let’s wait and see how those ideological rules sink his industrial-policy boat. On point, R Street’s Adam Thierer has this excellent thread on industrial policy dream vs. reality.
Meanwhile, over at the WSJ, Adam White notes that if “the Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party” is serious about making U.S. companies more competitive, it should look at removing the many regulations that hinder producers:
First among these is domestic regulation of crucial supply chains, especially for semiconductors. Congress recognized their strategic importance in the Chips Act. But its billions of dollars in federal subsidies will be squandered if lawmakers don’t do something about the host of regulations that currently block or deter the construction of chip fabrication plants and the broader ecosystem of facilities and companies a domestic semiconductor industry requires for long-term success. . . .
So, too, with the natural resources for semiconductors. The U.S. must challenge China’s dominance in producing the refined rare-earth minerals that go into both chips and green energy. But extracting, refining and using our domestic resources—such as the newly discovered 7-square-mile store of rare earths at Sheep Creek, Mont.—will require regulatory certainty and clarity, not the current morass that fosters litigation and deters development. As these pages noted last month, America suffers from a “green-energy mineral lockup.” To compete with China, Congress must unlock them.
There is much more at the link. And Politico reports:
As Washington prepares to pump $39 billion in federal subsidies into new microchip plants, the chip lobby is pressuring the Biden administration to relax environmental review requirements or risk ceding the semiconductor supply chain to China.
The Semiconductor Industry Association — the chip industry’s main voice in Washington — is pressing the Commerce Department to grant new manufacturing projects a “categorical exclusion” from a key environmental law. With billions ready to be spent under the CHIPS and Science Act, industry lobbyists worry the law’s review requirements could delay domestic chip production for years.
That’s about the National Environmental Policy Act, a rule that some on the left and the right agree plays a role in the difficulty of building anything in America. I wrote about it here:
However, no safety rule gathers more bipartisan calls for radical reform than the environmental-impact reviews required by the National Environmental Protection Act of 1970 (NEPA). Numerous studies show that this federal permitting process delays and drives up the costs of infrastructure projects.
As Jeremiah Johnson says in Liberal Currents, “NEPA is one of the primary reasons why it’s so hard to build anything in America.” He adds, “But the reality is that there’s not much evidence NEPA even does any good for the environment.”
Thanks to Lincicome for his Twitter feed. It is an endless source of information on idiotic policies.