The CHIPS Act is working. Trump wants to destroy it.

 

Just a few weeks ago, Donald Trump stood before Congress and spread dangerous misinformation — but who’s surprised? He called the CHIPS and Science Act, a bipartisan law focused on revitalizing American manufacturing “a horrible, horrible thing.” Then, he urged Speaker Mike Johnson to repeal it entirely. In reality, the CHIPS and Science Act is already delivering results. It’s created tens of thousands of jobs, sparked billions in private investment, and helped reduce our reliance on foreign-made semiconductors. Repealing it would set America back decades — and risk our global security, economy, and tech leadership. We can’t let Trump’s personal vendetta destroy technological innovation or endanger one of the most successful American economic initiatives in recent history. We need to make sure Congress hears from us. Add your name now to protect the CHIPS and Science Act. SIGN ON NOW » This isn’t just about microchips. It’s about American jobs, innovation, and independence. And once again, Trump is trying to tear it all down. Let’s fight back. —Democratic Values

Paid for by Democratic Values PAC CONTRIBUTE » Democratic Values PAC PO Box 15320 Washington, DC 20003 United States If you wish to donate by check, please make a check payable to "Democratic Values PAC" and mail it to PO BOX 15320 WASHINGTON, DC 20003

 CORPORATIONS USE EXCESS PROFITS FOR STOCK BUYBACKS TO AVOID 

TAXES!

Forwarded this email? Subscribe here for more

Buying back CHIPS

The only way to stop public money from being siphoned off to shareholders and top executives

Robert Reich Sep 24

Friends,

One of my goals in writing this letter is to expose where government needs to take a stronger hand to safeguard the public interest from corporate avarice.

I applaud the economic policies of the Biden-Harris administration, which have abandoned the neoliberal claptrap of former Democratic administrations and come down on the side of working people.

But I also want those policies to work. The administration’s commendable goal of reviving America’s semiconductor industry by subsidizing new chip factories in the United States is today endangered by the increasing likelihood that those subsidies will enrich big shareholders and CEOs rather than strengthen our semiconductor industrial base.

So far, nearly $30 billion in federal CHIPS grants have been awarded, with the grants going to 11 semiconductor producers.

But the major goal of these producers is not to revive America’s semiconductor industry. It’s to raise their share prices. Most of these producers have spent billions buying back their shares of stock in order to do just that.

As I’ve emphasized in previous letters to you, stock buybacks increasingly are being used by corporations to satisfy Wall Street’s insatiable demand for higher share prices.

But every dollar the semiconductor producers spend on buybacks is a dollar not spent on innovation for long-term competitiveness.

This contradiction between the public interest in a strong American semiconductor industry and corporate interests in high stock prices creates a significant risk that public subsidies in the CHIPS Act will be siphoned off to shareholders and top executives through stock buybacks.

Taxpayer money should not be used to boost share prices and CEO pay. Recipients of this money should not be allowed to engage in stock buybacks.

The first CHIPS grant of $35 million went to BAE Systems in June 2023. At the time, BAE was in the midst of a $2 billion stock buyback; another nearly $2 billion in stock buybacks has been authorized by BAE’s board.

Intel, America’s largest homegrown producer of semiconductors and already the recipient of $8.5 billion in CHIPS money has been authorized by its its board to buy back a further $7.24 billion of its own shares of stock. (Meanwhile, the administration has promised Intel nearly $20 billion in grants and loans.)

Intel spent $30.2 billion on buybacks between 2019 to 2023. It also assured investors last year that the company remained committed to delivering “very healthy” dividends.

All told, semiconductor producers now in line for $30 billion in public subsidies spent more than $41 billion on stock buybacks between 2019 and 2023.

Their CEOs — whose compensation packages are larded with stocks and stock options — have every incentive to continue pumping up their own corporations’ stock prices with buybacks.

According to a recent report from the Institute for Policy Studies and the Americans for Financial Reform Education Fund, CEOs whose corporations have entered into preliminary CHIPS agreements with the government hold more than $2.7 billion worth of stock in their companies ($306 million on average). They therefore stand to personally benefit from buybacks.

CHIPs money is being distributed to these corporations by the Commerce Department. Secretary of Commerce Gina Raimondo has given personal assurances that “CHIPS money is not a subsidy for big companies … for stock buybacks or to pad their bottom line.” The Department has stated that when awarding grants, it will give preference to companies who commit to not engage in stock buybacks.

But none of the companies receiving CHIPS subsidies has publicly committed to suspending their existing stock buyback plans.

The Commerce Department has only asked applicant corporations to detail their plans for stock buybacks over five years. (These applications and the subsequent agreements are not public.)

Moreover, it’s relatively easy for big corporations to shift money among units or subsidiaries to obscure buybacks, especially if other corporations buy parts of them or if outside private equity investors control parts of their operations.

Intel is a case in point. The chipmaker Qualcomm is now considering buying parts of Intel’s design business and possibly its foundry unit. And the giant private equity firm Apollo Management is likely to make a big investment in Intel (Apollo has already bought a stake in Intel’s chip-manufacturing operation in Ireland).

Given the increasing pressure from Wall Street and CEOs to use stock buybacks to boost share prices, the administration must ensure that public subsidies improve the semiconductor manufacturing base and do not merely enrich shareholders and CEOs.

How do do this? My humble advice to the Secretary Raimondo and the Biden-Harris administration: Bar all semiconductor producers who receive government subsidies from making stock buybacks. Make the prohibition explicit in all final CHIPS subsidy contracts.

October 23, 2023 HEATHER COX RICHARDSON

 

October 23, 2023 HEATHER COX RICHARDSON OCT 24 The word of the day is “conversations.” The White House and the Commerce Department announced the designation of 31 communities across 32 states and Puerto Rico in the first phase of the Regional Innovation and Technology Hub Program (Tech Hubs Program). The CHIPS and Science Act, signed into law in August 2022, authorized the creation of these hubs, where private industry, state and local governments, colleges and universities, labor unions, Tribal communities, and nonprofit organizations work together to innovate, create jobs, and protect our supply chains. The administration explained that because economic growth and opportunity has been “clustered in a few cities on the coasts,” the tech hubs selected were spread across the country. Nearly three quarters of them are in small cities or rural areas, and more than three quarters of them directly support historically underserved communities. The government will invest $500 million of public money in these hubs to attract private investment, hoping to create high-paying jobs and support innovation across the country.  The hubs focus on autonomous systems for manufacturing and transportation, drugs and medical devices, healthcare, clean energy, semiconductors, and so on. They “will boost U.S. manufacturing, create more good-paying jobs and bolster U.S. global competitiveness,” said Deputy Secretary of Commerce Don Graves. The administration is trying to sell the idea of investing in America rather than turning the economy over to the operation of markets. The latter has been the nation’s focus since 1981, but that ideology has not nurtured the economy so much as concentrated wealth among a few individuals. The White House has called instead for government investment in new industries, and it noted today that such investment has prompted record private investments in clean power and job growth in clean energy.  Private companies have announced investments of about $133 billion in clean energy production, which has in turn helped to spur the strong job growth and robust economic growth. Employers have added about 260,000 jobs a month this year, on average.  Today the ongoing United Auto Workers strike spread to a key Stellantis plant, where 6,800 workers walked off their jobs making Ram pickup trucks, Stellantis’s top-selling vehicle in the U.S. The strike will cost the company an estimated $110 million a week. There are now more than 40,000 UAW workers on strike. Ford, General Motors, and Stellantis have offered what union leader Shawn Fain says are record contracts but still not in line with the company’s record profits.  The UAW has reached a tentative deal with General Dynamics, covering about 1,100 workers who make military vehicles at defense contracting facilities. Union members still have to approve the agreement.  Conversations continue in foreign affairs as well.  Today is the fortieth anniversary of the 1983 bombing of the Marine Corps barracks in Beirut, Lebanon, that killed 241 U.S. military personnel in the single deadliest day for the U.S. Marine Corps since the Battle of Iwo Jima in World War II. Minutes after the first bombing on that day, a second suicide bomber killed 58 French paratroopers. Six Lebanese civilians also died. Today, Secretary of State Antony Blinken recalled that tragedy and blamed it on Hezbollah militants, a charge Hezbollah denies.  “As we reflect on this day, and in light of the ongoing challenges in Lebanon and the region, we remain committed to building a brighter future for Lebanon, the Lebanese people, and the broader Middle East,” Blinken said.  Attacks from Hezbollah on Israel and Israeli retaliation have been increasing since the October 7 attack by Hamas on Israel, and the U.S. Embassy in Beirut has told American citizens who want to leave that they should go now. The Biden administration has warned Israel not to launch a preemptive strike against Hezbollah as the tensions on the border rise. The U.S. is also sending more air defense systems to the Middle East and is moving the USS Dwight D. Eisenhower carrier strike group to the Middle East to discourage attacks.   President Biden, Secretary Blinken and their teams have been talking constantly with those involved in the Middle East and elsewhere, trying to build coalitions to stave off an expansion of the conflict between Israel and Hamas, backed by Iran. On Sunday, after Biden spoke with Israeli prime minister Benjamin Netanyahu and Pope Francis, Biden spoke with Prime Minister Justin Trudeau of Canada, President Emmanuel Macron of France, Chancellor Olaf Scholz of Germany, Prime Minister Giorgia Meloni of Italy, and Prime Minister Rishi Sunak of the United Kingdom. The latter group issued a joint statement reiterating their support for Israel’s right to defend itself against terrorism and also called for all parties to keep within the bounds of international humanitarian law, including the protection of civilians.  Today, Turkey’s president Recep Tayyip Erdoğan submitted to the Turkish parliament a bill approving Sweden’s bid to join the North Atlantic Treaty Organization (NATO), a step he has been delaying to pressure Sweden into clamping down on members of the Kurdistan Workers Party in Sweden, a party that aims to create an autonomous Kurdish region that would include parts of Turkey.  While taking pains to emphasize that it is not making decisions for Israel, the U.S. has been stressing to Israeli leaders its discomfort with what seems to be a lack of a plan for a careful ground invasion of Gaza or for what would come after the ground operation. State Department spokesperson Matthew Miller today declined to detail private conversations but offered: “[I]n all of our conversations we continue to talk to them about the importance of having meaningful goals, meaningful objectives, and a plan to achieve those objectives.”  Miller used the word “conversation” twenty times in his press conference. Tomorrow, Secretary Blinken will travel to New York City for a United Nations Security Council meeting on the situation in the Middle East. He will also meet with his counterparts and with officials of the United Nations.  As Israeli airstrikes pound Gaza and Hamas rockets fire back, relief trucks continue to trickle across the Egyptian border into Gaza. Fourteen crossed on Sunday; another small group today. Fuel, which is necessary to take the salt out of water as well as for medical care and transportation, is still embargoed out of Israeli concerns Hamas will take it for military purposes. Also today, Hamas released two more hostages, elderly Israeli women this time, for a total of four so far. Conversations of a different sort are going on among the Republican members of the House of Representatives, but they are unwilling to talk to their Democratic colleagues, who have repeatedly offered to work with those Republicans who reject MAGA extremism.  Republicans remain unable to agree on a candidate for speaker. So far, they have shut down the House for three weeks, eating up 20 of the 45 days the continuing resolution bought for them to come up with measures to fund the government. — Notes: https://www.whitehouse.gov/briefing-room/statements-releases/2023/10/23/fact-sheet-biden-harris-administration-announces-31-regional-tech-hubs-to-spur-american-innovation-strengthen-manufacturing-and-create-good-paying-jobs-in-every-region-of-the-country/ https://apnews.com/article/biden-raimondo-tech-hubs-innovation-jobs-of 205ef4710451f2d37595739056c648ae https://www.eda.gov/funding/programs/regional-technology-and-innovation-hubs https://www.commerce.gov/news/press-releases/2023/10/biden-harris-administration-designates-31-tech-hubs-across-america https://www.reuters.com/markets/europe/roaring-us-economy-foreign-murk-feeds-home-bias-2023-10-18/ https://www.cnn.com/2023/10/22/economy/stocks-week-ahead-q3-gdp/index.html. https://fortune.com/2023/10/22/what-will-us-economy-gdp-third-quarter-hot-4-3-percent-survey-economists/ https://www.cnn.com/2023/10/22/economy/stocks-week-ahead-q3-gdp/index.html https://www.state.gov/secretary-blinkens-travel-to-the-united-nations/ https://www.state.gov/40th-anniversary-of-the-beirut-marine-corps-barracks-bombing/ https://www.whitehouse.gov/briefing-room/statements-releases/2023/10/22/joint-statement-on-israel-2/ https://www.washingtonpost.com/world/2023/10/22/israel-gaza-war-hezbollah-iran/ https://www.nytimes.com/2023/10/20/us/politics/biden-israel-hezbollah-war.html https://www.reuters.com/world/turkeys-erdogan-submits-swedens-nato-bid-parliament-ratification-presidency-2023-10-23/ https://www.vaticannews.va/en/pope/news/2023-10/pope-francis-phone-call-usa-president-biden-peace.html https://www.nytimes.com/2023/10/23/us/politics/israel-us-gaza-invasion.html https://www.state.gov/briefings/department-press-briefing-october-23-2023/ https://www.whitehouse.gov/briefing-room/press-briefings/2023/10/23/press-briefing-by-press-secretary-karine-jean-pierre-and-nsc-coordinator-for-strategic-communications-john-kirby-22/ https://www.cnn.com/2023/10/23/business/uaw-stellantis-strike/index.html https://www.reuters.com/business/autos-transportation/uaw-reaches-tentative-agreement-with-general-dynamics-2023-10-23/

The truth about the economy that you’re not hearing Also: Please join me tomorrow for my very last class ever. I’ll be summarizing my “Wealth and Poverty” class, and also — in a way — summarizing my career as a teacher. Please join me, right here. ROBERT REICH JUL 6 We learned last Thursday that the U.S. economy grew at an annualized 2 percent rate in the first quarter of this year. That’s well above economists’ expectations of around 1.4 percent. But if you didn’t get this news, you’re not alone. Good economic news doesn’t make it through the negative sludge of Fox News or Newsmax. It almost doesn’t get through the mainstream media, either. There’s more good news on the economy. In the four years of Donald Trump’s administration, total spending on manufacturing facilities grew by 5 percent. During the first two years of Biden’s administration, manufacturing investment more than doubled. And about 800,000 manufacturing jobs were created. These remarkable results are the outcome of Biden policies — the Inflation Reduction Act and its green technology provisions, the infrastructure bill, and the CHIPS Act. What about inflation? Biden’s stimulative spending did boost inflation. But the news that’s not getting through to most Americans is that inflation is dropping. It has declined significantly from its mid-2022 highs above 9 percent. Consumer prices are now rising by about 4.9 percent annually — still a problem, but not nearly the problem it was. Inflation in the United States is now well under the levels in European nations that made no comparable efforts to stimulate their own economies. I continue to believe that much of the remaining inflation is due to the outsized profit margins that many major businesses have seized for themselves. Even the IMF recently found this. I wish Biden would make an issue of those profit margins. They’re enriching those at the top while imposing a big penalty on everyone else. And wages? For a while, real (adjusted for inflation) wages really were falling, and many economists were worried about rapidly rising unit labor costs. But now that inflation is subsiding, unit labor costs are moving in the opposite direction, and real wages are picking up again. So why do so many Americans continue to think the economy is awful? According to the Gallup economic confidence index, Americans haven’t felt this bad about the economy since the global financial crisis in 2008 and 2009. In an NBC News survey conducted a few weeks ago, at least 74 percent of Americans said the country is on the wrong track. The University of Michigan’s Consumer Sentiment Index is also pessimistic. Given all this, it’s not surprising that Joe Biden’s approval numbers have been stuck at around 43 percent. That’s bad news for an incumbent president running for reelection. History shows that presidents tend to lose reelection bids when about 70 percent of Americans think the country is on the wrong track. They tend to win when fewer than half of Americans think that. So the obvious question is, why are Americans are feeling so bad about an economy that’s relatively good? One reason, I think, is a general sense of dread — centering on Trump, DeSantis, and Republican lawmakers in Congress — that seems to affect everything else. (I don’t know about you, but I sometimes have difficulty getting to sleep, worried about the rise of authoritarian fascism in America.) A recent study found that headlines have grown starkly more negative, conveying anger and fear. Then, too, there’s a kind of national pandemic-related PTSD from which many of us are still suffering. But I think the deeper reason Americans don’t feel very good about the economy is that is that the vast population of working non-college grads — some two-thirds of Americans — are still bogged down in dead-end jobs lacking any economic security, while struggling with many costs (such as housing, child care, and education) that continue to soar. In other words, the economy is getting better overall — but overall has become a less and less useful gauge as the rich get richer, the poor grow poorer, and the working middle is under worsening siege. What do you think? (See you tomorrow for my last class, ever.)

TOP NEWS: Corporate Interests Have Given $21.5 Million to GOP 'Sedition Caucus' Since Jan. 6 Attack

 

July 26, 2022

Top News

Texas Abortion Ban Turned One Woman's Pregnancy Into a 'Dystopian Nightmare' "Anti-abortion zealots should be forced to read this..." asserted one journalist. "They are responsible for her suffering." by Brett Wilkins 'Really Inexcusable': Progressives Lament Democrats' Failure to Reverse Trump Tax Cuts "If the so-called party of the people cannot raise taxes on the ultra-rich they have little purpose other than being yet another handmaiden for the wealthy in Washington." by Jake Johnson Corporate Interests Have Given $21.5 Million to GOP 'Sedition Caucus' Since Jan. 6 Attack "Corporations owe an explanation as to why they keep funding Donald Trump's pawns in Congress who tried to finish what the insurrectionists started." by Jake Johnson

More Top News

• Warren, Padilla Demand Buttigieg Crack Down on Airline Industry's 'Rampant Unfair Practices' • Pence's Ex-Chief of Staff and White House Lawyer Testified to Jan. 6 Grand Jury • Sanders Shreds Big Tech's $76 Billion 'Corporate Welfare' Payday in CHIPS Act • Study Ties 'Forever Chemicals' Exposure to Billions in US Health Costs • Biden Told Not to Give Publicly Owned Covid-19 Vaccine Tech Over to Corporations • Rejecting 'Business as Usual' While Planet Burns, Students Vow to Occupy Schools Worldwide • Greenpeace Sues UK Government to Stop Massive Offshore Drilling Project

VIEW ALL NEWS

Opinion

The Global Ruling Class Is Frog-Marching Us Towards Extinction We were warned for decades about the death march we are on because of global warming. And yet, the global ruling class continues to frog-march us towards extinction. by Chris Hedges Performative Cruelty Is Republicans' Only Remaining Policy Being mean and nasty to perceived enemies is all the GOP has to offer. by Mike Lofgren Trump Is the GOP and the GOP Is Trump—Both Must Be Vanquished The dramatic Jan 6. hearings have shown why the former president must be held to account and why the Republican Party, with or without LIz Cheney, must be defeated. by Jeffrey C. Isaac

VIEW ALL OPINION

Call 207.775.0488 to donate by phone or mail a check to: Common Dreams, PO Box 443, Portland, ME 04112, United States Common Dreams is a 501(c)(3) nonprofit. Your contribution is tax-deductible. EIN: 20-3368194