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Washington Puts Its Chips on Chips

Froma Harrop on

Should Washington push an "industrial policy"? That is, should the U.S. government get involved in promoting certain domestic industries?

Darn straight it should. And that goes double when it comes to semiconductors. Computer chips are the little brains that run appliances, airplanes, mobile phones and cars. You can't have a modern economy without them.

We saw what happens when key manufacturing activities go offshore. During the COVID-induced supply chain crisis, Western manufacturers couldn't get their hands on the chips they needed to meet demand for their products. Some had to close or slowed production.

American automakers were especially handcuffed. General Motors, for one, blamed the chip shortage for a 15% drop in its U.S. deliveries of new vehicles in the second quarter from a year earlier.

And so it's hard to overstate how bringing chip-making to this country is good for this country. It would not only create many thousands of American jobs; it would ensure that other U.S. manufacturers don't have to beg Asians for semiconductors.

Toward that end we should hail the Chips and Science Act, championed by the Biden administration. It was astounding that 187 Republican House members voted against the bill, though gratifying that 24 did.

 

The GOP leadership had joined Chinese lobbyists in opposing it. Never mind that chip independence had the full-throated support of several former Trump officials, notably former National Security Adviser H.R. McMaster. To partisan robots, the national interest rarely overrides the joys of political warfare.

Commerce Secretary Gina Raimondo rightly called the $52 billion in new semiconductor money "rocket fuel for our global competitiveness."

Asia dominates the production of semiconductors. Taiwan makes 65% of the world's semiconductors and accounts for nearly 90% of the advanced chips. And if China attacked and took over Taiwan, an adversary would have a stranglehold on America's -- and the world's -- manufacturing.

Meanwhile, the Chinese government has been pouring hundreds of billions of dollars into its own semiconductor industry. So, by the way, have the Europeans.

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