The CHIPS Act Is Corporate Welfare Disguised as Industrial Policy

“Industrial policy is making a comeback. For those of you under the age of 50, this is just another term for corporate welfare—a lovely name for the unlovely practice of a government granting subsidies, protective tariffs, and other privileges to politically influential industries or companies. It’s often done in the name of some lofty goal such as strengthening national security or ensuring that America is a leader in the “industries of the future.” But the outcome is always the same: wasteful, unfair, unsuccessful, and unjustified. Oh, and it invariably grows the budget deficit.

The latest form of industrial policy is Congress’s CHIPS Act of 2022, a bill meant to subsidize the semiconductor industry by channeling taxpayer money to build up domestic production capacity and combat feared Chinese computer-chip supremacy.

This chapter began with the disruption caused by lockdowns to global supply chains. Unsurprisingly, that led to a series of semiconductor shortages aggravated by a surge in demand for automobiles. Automakers wrongly assumed that the original drop in demand would persist, canceled orders for semiconductors, and then could not keep up with the buying public.

Now, Congress is responding to this temporary chip shortage with $52 billion in subsidies and $24 billion in tax credits mostly directed at semiconductor industry beggars.

Never mind that chip firms have already expanded production without subsidies. In fact, two years into negotiating this bill, it’s obvious that it has little to do with any alleged structural deficiencies in the semiconductor market. For instance, the initial chip subsidy proposal had a $16 billion price tag. Since then, the industry has announced its own investments totaling over $800 billion, with $80 billion committed for near-term investment in U.S.-based fabrication facilities. Yet somehow, the bill more than tripled in price to target a problem that’s already being solved.

What about the argument that China is subsidizing its chip producers and thus threatening our technological leadership? Yes, China subsidizes its chip industry, but this doesn’t guarantee their subsidies will work. If U.S. politicians could for a moment stop treating every Chinese action as a threat, they would see that the Chinese semiconductor industry is both quantitatively and qualitatively weak. In fact, many of the companies subsidized would go under without the government’s help. That’s hardly the sign of a vibrant industry. These subsidies are more like life support than super-vitamins.”

“” Any resulting new operations would still face deep-rooted issues hindering American manufacturing. Large-scale environmental assessments will be required, but over the years, the costs and delays have become excessive. Recent trends promoting or requiring unionized workers for federal contracts, combined with the current labor shortage, will hinder chipmakers’ ability to find talent and could exacerbate the cost of domestic production. ”

In other words, if you believe that moving most of our chip production onshore is important for national security reasons, you should labor for regulatory reforms rather than subsidies.”

Impact of Supreme Court’s climate ruling spreads

“Fallout from the Supreme Court’s attack on federal climate regulations is spreading throughout the executive branch, creating legal uncertainty for rules on topics as far afield as abortion, immigration and even amateur auto racing.

Opponents of federal actions on pipelines, asbestos, nuclear waste, corporate disclosures and highway planning are also seizing on the logic of the court’s June 30 decision, which imposed sharp limits on the Environmental Protection Agency’s authority to regulate greenhouse gases.”

“In their decision, the high court’s six conservative justices invoked what they called the “major questions” doctrine to declare that agencies such as EPA need explicit congressional approval before “asserting highly consequential power” over almost any policy area. But they did not offer a precise definition of what would cause a regulation to qualify as major — a question that agencies and lower courts may now need to spend years wrestling with.”

““If anything’s ambiguous at all, you get people challenging on major questions grounds, and you have to go find out if Congress gave you an extra clear statement,” said Nathan Richardson, a law professor at the University of South Carolina. He called it a reversal of the long-standing tradition of courts deferring to agencies’ policy expertise. “It’s not deference, it’s anti-deference.””

Opinion | The Supreme Court Reform that Could Actually Win Bipartisan Support

“There is one idea, though, that has longstanding bipartisan support, a proven record of success, and practical wisdom behind it: term limits. Imposing term limits on Supreme Court justices would be good for the country and the court. It would help ease the bitterness of the confirmation process and make the court more representative of the public’s views. And while conservatives might currently balk in light of their 6-3 majority, it’s a change that would not necessarily advantage either side over the long run.

The most common version of this reform contemplates justices serving nonrenewable 18-year terms, staggered so that one term ends every two years. This would mean that presidents would get to nominate new justices in the first and third years of their own administrations. Retirements and nominations would occur like clockwork. The result would be a court whose membership, at any given time, would reflect the selections of the past 4 1/2 presidential administrations.

Because Article 3 of the Constitution confers life tenure upon all federal judges, term limits would likely require a constitutional amendment.”

Opinion | You Trust the Media More Than You Say You Do

“any honest assessment would find today’s newspapers more timely and accurate, fairer, and often better-written than the newspapers of 1979.”

“Citing a near-universal decline in institutional confidence isn’t an attempt to offer an excuse for newspapers. But it illustrates the pervasiveness of public colic over American life and society, and suggests the institutions might not have changed as much as the perceptions of them have. The best explanation for the uniform drops might be that we’re living in an age of heightened criticism and scrutiny that leaves no faults or blemishes unnoticed compared to earlier eras.”

“Another possible reason the press might have lost confidence: Reporting has not just become more critical in the past 40 years, but it’s also started covering topics it left largely untouched in earlier times. As Matthew Pressman wrote in his 2018 book, On Press: The Liberal Values That Shaped the News, as recently as the early 1960s, newspapers largely ignored matters of race, sex, class and inequity, topics that can make some readers squirm. There weren’t many stories about gender or trans issues in 1979. Other sacred cows, like organized religion, get much more scrutiny today than they did yesterday.”

“Yet does the public really have such a low opinion of newspapers? Gallup’s wording of its question is pretty vague. It didn’t ask respondents to rate the specific newspapers they read but to express their levels of confidence in the newspaper as an institution. They might have gotten a more positive answer if they had asked people how they feel about the daily newspaper they actually read. When the Pew Research Center asked this question in 2005, they found that 80 percent of Americans give favorable ratings to their daily. Local TV news, cable news and network TV news are rated only slightly worse. Granted, that’s data from a 17-year-old survey, but it shows that asking a slightly different question about the press can produce a startlingly different answer.”

Opinion | The Supreme Court Decisions on Guns and Abortion Relied Heavily on History. But Whose History?

“History has always played a role in constitutional interpretation, for some jurists more than others. But if history is going to be a key driver for the Supreme Court’s decisions — on the assumption that it is more legitimate than other forms of judicial discretion — then it is imperative to ask where the justices are getting their historical sources, whether those sources are fact-checked, and (most importantly) who is narrating the history.

Increasingly, the justices are relying on amicus briefs for historical information. Amicus briefs — also called “friend of the court” briefs — are submitted by third parties and have gone through a tremendous growth spurt at the Supreme Court in recent years.”

“These amicus briefs — sometimes signed by historians, sometimes not — are virtually all written by lawyers and often filed by motivated groups that are pressing for a particular outcome. The history they present, in other words, is mounted to make a point and served through an advocacy sieve. That distinguishes this type of history from the work product of professional historians who (even when they have a point of view) are trained to gather evidence dispassionately. As historian Alfred H. Kelly once put it, “The truth of history does not flow from its usefulness.” But usefulness is exactly the point when litigating a case at the Supreme Court — and historical sources are being used by the advocates to win.”

“The modern reality is the justices look to their friends and allies for historical sources, and rather than fact-check them — which they don’t have the time, resources, or expertise to do — they accept these historical narratives at face value. In the end, this creates an echo chamber where the history the justices cite is the history pressed to them by the groups and lawyers they trust, which conveniently comports with their preexisting worldviews and normative priors.”

“Professional historians are already complaining that the court got the history wrong in its recent cases, either by cherry-picking authorities or leaving out important nuance or both. When it came to the history of gun regulation, the court was awash in competing historical amicus briefs. The court chose one side, and in so doing caused historians to cry foul that the other history was ignored or distorted. In the abortion case, historians of the Middle Ages say some of the texts the court cites as proof that abortion was a crime in the 13th century are not about what we would think of as crime at all, but instead about “penance” imposed by the Church — an ambiguity easily lost on people who are unfamiliar with medieval Latin. Indeed, it is worth noting that much of the 13th-century history the court recounts seems to have come from a brief filed not by historians, but by professors of jurisprudence who publish on the moral implications of abortion — well-respected professors in their fields, perhaps, but certainly not medievalists.
This reveals a systemic problem about relying on amicus briefs for historical narratives: The amicus market is dominated by motivated scholars. Because many neutral experts do not pay attention to the courts or participate in advocacy, the historical accounts presented to the justices are necessarily incomplete and motivated to build a particular argument.”

“the Supreme Court should require anyone who files an amicus brief to disclose who paid for it. Current rules require disclosure only of whether the party contributed financially or otherwise to the brief, but they do little to shed light on briefs filed by neutral-sounding organizations that are in reality funded by those with an interest in the case (even if not the party).”

“the justices should borrow a practice from the laws of evidence and forbid any amicus brief presenting historical or other factual claims from adding accompanying legal argument. At trial in lower courts, there are strict limits on expert witnesses offering opinions on the law or generally opining on the case’s outcome. The idea is that this legal commentary detracts from the status of the expert as a neutral adviser, and that it oversteps the value and point of an expert witness in the first place.”

“justices should build in a process to request the specific history they are interested in earlier in the case’s timeline — in an attempt to recruit historians who may not be following the court’s every move but who are actual experts in the matter. If historians of medieval law knew their knowledge on abortion in the 13th century was so valuable when the court took the case (as opposed to after the leak in Dobbs) there might be incentive for more of them to participate in the briefing process.”

“If we are going to empower judges to referee history we must start paying more attention to the process through which they acquire that history. Many Americans see the court’s recent decisions as a threat to judicial legitimacy; perhaps one under-recognized threat to that legitimacy lies in the process used to make them.”

Opinion | Both Parties Are Getting It Wrong on Parental Leave

“It is not difficult to design a good national parental leave program that provides time off and a bit of cash to all new parents based on their prior income. It is as simple as slightly increasing the Social Security payroll tax and then instructing the Social Security Administration (SSA) to provide all new parents with a few months of cash benefits equal to a high percentage of their usual weekly earnings or a decent minimum benefit.”

“With the exception of the Cassidy-Sinema proposal, all of the parental leave bills in the current Congress use work history requirements to exclude a large minority of new parents from benefit eligibility.”

“In addition to failing at income replacement, the Cassidy-Sinema proposal also makes no sense as an administrative matter, which perhaps explains why it is the only plan that has no accompanying bill text. Child Tax Credit eligibility is redetermined every year based on the income of the household that the child resides in. Families with very low or high incomes are not eligible for the CTC and so it is unclear how they would pay back the benefit they received. Children often move between households from year to year, whether due to divorce, family instability or otherwise. In these scenarios, the person who receives parental leave benefits under the plan is not the same person who is eligible for the subsequent years of CTC benefits, which also makes it hard to understand how paying back the benefit would actually work.
Like the Cassidy-Sinema plan, the Rubio-Romney New Parents Act also relies on parents paying back the benefits they received in order to finance the program. But in the New Parents Act, this is accomplished by docking parents’ Social Security checks when they retire.

Making people poorer in retirement in proportion to the number of children they have is strange, especially if you believe, as bill sponsor Marco Rubio does, that parents are already “double-charged for federal senior entitlement programs” because they both pay into them directly and undergo huge personal costs to raise up the next generation of workers that keep the programs afloat for parents and non-parents alike.

But even more bizarre than trimming Social Security checks to finance the program is the provision of the New Parents Act that requires the SSA to recover the leave benefits paid to parents who die before retirement by going after the deceased parents’ estate. Requiring surviving spouses and orphaned kids to pay a deceased parent’s leave benefits back to the government is as cruel as it is unnecessary.”

“What’s remarkable about how bad all of these proposals are is that their problems are so easy to fix. In some policy areas, badly designed programs are the result of difficult decision-making and navigating powerful interests and entrenched constituencies. With parental leave, the policymakers are essentially starting from scratch. There is no good reason why an ideal leave program — i.e. one that is publicly-administered, inclusive of all new parents, provides scaled income-replacement, has a decent minimum benefit, and does not need to be paid back — could not be implemented.
Yes, it would mean raising taxes, but only by a tiny amount: Washington, D.C.’s paid leave program, which includes both parental leave and medical leave, is funded by a 0.26 percent employer payroll tax, more than a standalone parental leave program would cost. That’s all it takes to create simple, popular programs.

Lawmakers in both parties seem hellbent on much worse approaches, but it’s not too late to get it right. Doing so would deliver not only much-needed help to the public but likely a major political win to whichever party can figure it out.”

Opinion | Putin’s Genocidal War

“A Putin victory would mean the empowerment of a brutal regime committed to wiping out Ukraine’s culture and civil society. Inside a Russian-controlled Ukraine, millions would need to submerge their ethnolinguistic identity, which has been deepening its roots over the 30 years since Ukraine won its independence from the Soviet Union. For millions of Ukrainians, Russian rule would therefore create the stark choice of cleansing themselves of their ethnicity or being ethnically cleansed. A Russian victory would further mean that the initial exodus of six million Ukrainians would be followed into Europe and elsewhere by the flight of many additional millions for whom life is intolerable.

This puts into clear relief the stakes in Ukraine’s courageous struggle against Putin’s Russia. It is the reason why the West’s commitment to arming Ukraine must not flag. Failure to support Ukraine and pressure Russia would not only permit nascent genocidal practices, deepening a mass humanitarian and human rights horror; It would embolden an aggressive, increasingly repressive Russia to menace other neighboring states. We cannot allow this to pass.”

The Forgotten Constitutional Weapon Against Voter Restrictions

“perhaps a largely forgotten provision of the Constitution offers a solution to safeguard American democracy. Created amid some of the country’s most violent clashes over voting rights, Section 2 of the 14th Amendment provides a harsh penalty for any state where the right to vote is denied “or in any way abridged.”

A state that crosses the line would lose a percentage of its seats in the House of Representatives in proportion to how many voters it disenfranchises. If a state abridges voting rights for, say, 10 percent of its eligible voters, that state would lose 10 percent of its representatives — and with fewer House seats, it would get fewer votes in the Electoral College, too.”

Biden launches plan to bring solar to low-income homes

“The initiative would connect participants in a federal program that subsidizes energy costs for low-income residents with developers of community solar projects, which sell subscriptions to households for renewable power with the promise of lowering their monthly electricity bills.

The Biden administration has big aspirations for the program, projecting it could spur the development of 134 gigawatts of new solar power capacity nationwide, the agency official said. To put that in perspective, total U.S. solar capacity today sits at 97.2 gigawatts, according to the Energy Department.

And it could lead to sizable savings, too: DOE estimated participants in the five initial pilot project states and the District of Columbia alone would save more than $1 billion on their energy bills annually.”