One recurring theme that no one in Washington seems capable of learning is that the best way to destroy an industry is to have the government subsidize it.
That lesson came shining through in recent days when Intel acknowledged that it suffered a $16.6 billion quarterly loss. That is more than the entire annual budget of some states.
Wait. Isn’t this the same Intel that is in line to be the biggest corporate welfare recipient of federal aid under the CHIPS Act — the Biden bill designed to make sure that microchips are made in the United States, not China? Intel is first in the soup line to receive $8.5 billion in grants and $11 billion in subsidized loans. The checks haven’t been written yet, but this will be one of the biggest welfare checks ever written to an American company.
Maybe President Joe Biden, who had a joyous photo op with Intel officials when the bill was passed, should have second thoughts. Intel’s near broke. They were just replaced by their rival chipmaker Nvidia in the Dow Jones composite. Nvidia gets none of the stash from the CHIPS Act, yet its stock price has soared more than five-fold. It has been on a hiring spree and has made hundreds of billions of dollars for American investors — including pension and 401k plans.
Talk about politicians betting on the wrong horse.
It gets worse. Semafor Technology reports that instead of pulling the plug on this near $20 billion aid package, Biden officials and Sen. Mark Warner of Virginia — one of the lead sponsors of the CHIPS Act — “have discussed whether the company needs more help.” More?
This despite that Bloomberg reported that Intel has failed to provide federal officials with a viable plan to turn its financial woes around. Why do that when you have an umbilical cord to the federal Treasury?
Ironically, Intel made more than $20 billion in profits before the CHIPS Act welfare bill was passed. So far this year it has lost nearly $20 billion.
What is next? A federal takeover of Intel as happened with failing automakers and banks in 2008?
There is an important lesson here. Many Democrats and Republicans have become enamored with the idea of America adopting a Japanese-style “National Industrial Policy” that would direct hundreds of billions of tax dollars to nurture “strategically important industries” — such as manufacturing, tech products and “clean energy.”
The politicians think they can pick winners and losers better than private investors who allocate funds in our highly efficient multi-trillion dollar capital markets. Democratic Massachusetts Sen. Elizabeth Warren has effectively declared war on the half-trillion-dollar booming private equity industry, which she calls “vampires,” because sometimes they make bad bets.
But maybe it’s Uncle Sam that sucks the blood out of viable businesses. Look no further than Biden’s EV handouts, which have only corresponded with a massive consumer rejection of an industry that was flourishing before Uncle Sam started passing out tens of billions of dollars to the car manufacturers and strong-armed the U.S. auto industry to produce them. Over the past four years the federal government has authorized more than $300 billion in green energy subsidies including wind and solar power grants and yet the amount of power they produce has barely budged — thanks to low-priced natural gas.
If we want American industries to be number one, the government should stop giving them money and the CEOs should stop taking it.
Stephen Moore is a contributor to The Daily Caller News Foundation, senior fellow at the Heritage Foundation, and co-founder of Unleash Prosperity. His latest book is The Trump Economic Miracle, co-authored with Arthur Laffer.
While the Biden-Harris administration is still boasting of the success of the CHIPS and Science Act, the Intel Corp. announced it will cut 15,000 jobs across the nation, “as part of the broad-based cost savings plan.” New reports show that almost four hundred of those job cuts will be at the company’s Ocotillo campus in Chandler.
As reported by Phoenix Business Journal, the series of layoff has come despite an upcoming injection of billions of taxpayer dollars via the CHIPS Act aimed at expanding the Chandler facility. Intel as a whole has approximately 12,000 employees in Arizona.
In a written statement Intel explained, “As part of the broad-based cost savings plan we announced in August, we are making the hard but necessary decisions to reduce the size of our workforce. These are the most difficult decisions we ever make, and we are treating people with care and respect. These changes support our strategy to become a leaner, simpler and more agile company as we position Intel for long-term sustainable growth.”
According to The Center Square, the office of Arizona’s Democrat Governor Katie Hobbs was quick to announce the mobilization of state taxpayer-funded resources being made available to the laid off Intel workers.
Spokesman Christian Slater told the outlet, “The Governor’s Office is already mobilizing rapid response resources at DES to connect affected workers with the resources they need to receive support and find new employment. Ensuring that every Arizonan has access to good-paying jobs is a top priority for Governor Hobbs, and she will continue bringing together workers and businesses to navigate challenges, create jobs and build an economy that helps every Arizonan thrive.”
The company was recently granted up to $8.5 billion in CHIPS Act funding, leading to scrutiny over their 15k global layoffs.
I've been asking AZ politicians about this, given that AZ was one of the four states to which the money was allocated for Intel.https://t.co/m2sIsRzW1i
In an August statement, Hobbs stressed Intel’s expansion in the state after the non-specific “cost savings plan,” was announced saying, “They’re expanding here. We’re thrilled to have their expansion here. We’re working with them on workforce initiatives to grow the skilled pipeline of workers that they need. We’re continuing to do that.”
Any direct mention of the billions of dollars earmarked for Intel via the CHIPS Act was decidedly absent from the Hobbs administration’s statement. However, a statement from the office of Senator Mark Kelly (D-AZ) doubled down on the multi-billion-dollar giveaway, which failed to prevent the layoffs.
Kelly’s office wrote that the round of layoffs, “further underscores the importance of the CHIPS Act.” His office added, “American companies like Intel are facing unprecedented competition from China, but thanks to the CHIPS Act, we’re making sure Intel, and other companies can manufacture the most advanced chips right here in America—creating thousands of construction jobs, and generating even more good-paying, permanent technician jobs in Chandler and across the state that don’t require a four-year degree.”
As reported by the New York Post in August, despite the passage of the CHIPS Act, Intel suffered a staggering $1.6 billion in losses, with CEO Pat Gelsinger saying, “Simply put, we must align our cost structure with our new operating model and fundamentally change the way we operate,” per the memo published to the firm’s website. “Our revenues have not grown as expected – and we’ve yet to fully benefit from powerful trends, like AI. Our costs are too high, our margins are too low.”
When the initial announcement broke in August, Republican Senate candidate Kari Lake placed the blame for Intel’s problems squarely on the Biden-Harris administration in a post to X, writing, “For over 45 years, Arizona has been Intel’s U.S. manufacturing powerhouse. In the last job reports, Intel Shares plunged 20%, forcing them to lay off more than 15% of their employees. These are the devastating consequences #Bidenomics is having on our state. In the US Senate, I will work with President Trump to cut the deficit, turbocharge the economy, & bring back good jobs so that all companies both big & small can thrive in State 48.”
For over 45 years, Arizona has been Intel’s U.S. manufacturing powerhouse.
In the last job reports, Intel Shares plunged 20%, forcing them to lay off more than 15% of their employees.
These are the devastating consequences #Bidenomics is having on our state.
Intel’s CEO also noted that staff drawdowns through voluntary exits in September via “early retirement and separation offerings,” already had the company almost halfway to its 15k downsizing goal. But Gelsinger warned at the time, “We still have difficult decisions to make and will notify impacted employees in the middle of October.”
The Grand Canyon State welcomed a grand manufacturing funding expansion this week.
On Wednesday, President Joe Biden appeared in Chandler, Arizona, at the Intel Ocotillo location to “announce that the Department of Commerce has reached a preliminary agreement with Intel to provide up to $8.5 billion in direct funding along with $11 billion in loans under the CHIPS and Science Act.” According to a White House fact sheet, this investment would “support the construction and expansion of Intel facilities in Arizona, Ohio, New Mexico, and Oregon, creating nearly 30,000 jobs and supporting tens of thousands of indirect jobs.”
Today, President Biden announced a historic agreement with Intel to build and expand four semiconductor manufacturing facilities here in America – helping put us on track to manufacture 20% of the world’s leading-edge chips by the end of the decade. pic.twitter.com/EeUtyFTw3R
In a post on “X” after his speech, President Biden wrote, “Semiconductors are the tiny computer chips smaller than a fingertip that power our everyday lives. We invented them, but over time we moved manufacturing overseas. I came to office determined to bring their production home. That’s what our CHIPS Act does.”
Semiconductors are the tiny computer chips smaller than a fingertip that power our everyday lives.
We invented them, but over time we moved manufacturing overseas.
I came to office determined to bring their production home.
Arizona Governor Katie Hobbs attended the event at Intel and spoke to attendees. After the announcement, Hobbs championed the increased funding for a vital sector within her state, saying, “I’m excited to announce that Intel will receive a historic investment from the CHIPS Act, made possible thanks to President Biden’s leadership. This critical investment will drive innovation, create jobs, and solidify Arizona’s position as a leader in semiconductor manufacturing.”
I’m excited to announce that @Intel will receive a historic investment from the CHIPS Act, made possible thanks to @POTUS' leadership. This critical investment will drive innovation, create jobs, and solidify Arizona’s position as a leader in semiconductor manufacturing. pic.twitter.com/cu0CC6k4qq
Hobbs added, “Our success story is only possible with our exceptional workforce. BuildItAZ, Future48 Workforce Accelerators, and semiconductor apprenticeships will help ensure Arizonans are ready to take advantage of these good paying jobs. Intel has been a leader in the Arizona business community for decades. Thank you to CEO Pat Gelsinger for continuing our partnership. Your vision and leadership are driving innovation, creating jobs, and strengthening Arizona’s position in the global semiconductor industry.”
Gina Raimondo, the Secretary of the Commerce Department, also took part in the gathering at Intel. She shared, “Today, we announced an $8.5 billion preliminary agreement with Intel that will help strengthen supply chains, revitalize American semiconductor manufacturing, and create nearly 30,000 jobs. It was great to join President Biden in Arizona to share the news.”
Today, we announced an $8.5 billion preliminary agreement with @Intel that will help strengthen supply chains, revitalize American semiconductor manufacturing, and create nearly 30,000 jobs.
“Today is a defining moment for the U.S. and Intel as we work to power the next great chapter of American semiconductor innovation,” said Intel CEO Pat Gelsinger. “AI is supercharging the digital revolution and everything digital needs semiconductors. CHIPS Act support will help to ensure that Intel and the U.S. stay at the forefront of the AI era as we build a resilient and sustainable semiconductor supply chain to power our nation’s future.”
Huge news for American semiconductor manufacturing and technology leadership.
Gov. Katie Hobbs won’t disclose how much her inauguration ceremony will cost, or how much donors paid for it. Hobbs’ decision to withhold the donors’ identities not only contradicts her campaign promises but past administrations’ transparency on the subject.
Hobbs listed 137 sponsors for the event, but didn’t disclose how much they paid.
Sponsors include the Arizona Education Association, APS, Arizona Coyotes, Banner Health, BlueCross BlueShield, Boeing, Cigna, Cox, CVS, Deloitte, Gila River Indian Community, Greater Phoenix Leadership, Healthcare Rising Arizona, Horizon Strategies, Human Rights Campaign, Intel, Motorola, Pepsico, Phoenix Suns, PhRMA, Southwest Gas, SRP, Comcast, Amazon, Anheusesr-Busch, CoreCivic, Lockheed Martin, Paypal, and Safelite.
Tickets were $150 for the public to attend. Following widespread reporting on the lack of transparency around the event, ticket registration was listed as free.
In a statement to Arizona Capitol Times, Hobbs’ press aide Murphy Hebert said the event is a private one not paid for with public funds.
The secretive nature of Hobbs’ first days in office may be a lasting trait throughout her administration. The governor barred reporters from attending a swearing-in ceremony on Monday.
Hobbs’ first promise when she announced her candidacy for governor was to “deliver transparency.”
I’m running for Governor to deliver transparency, accountability, and results for Arizonans — just like I’ve done my whole career.
Hobbs’ bio on the newly revamped governor’s website also promises transparency from this new administration.
“A fearless advocate for Arizona, Katie will bring transparency and accountability to the governor’s office and deliver real results for all of us,” reads the bio. “Katie knows firsthand that government only works well if it’s led well. For Katie, that means transparency and accountability.”
Those interested in watching the inauguration ceremony may do so here:
Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to corinne@azfreenews.com.
In the ongoing struggle between academic and social instruction in schools, perhaps we are leaving out the most practical instruction of all—job skills training.
As our local economy continues to develop, there has been a shortage of both skilled and non-skilled workers who can take jobs that are available. This has frustrated business owners and slowed economic growth. A prime example is Intel, which is building two world class wafer fabrication facilities here in Chandler. These projects will employ thousands of workers in high-paying jobs during their construction and once it is completed. We should be preparing our local Chandler Unified School District (CUSD) kids to fill those jobs. That requires a plan.
What Would It Take to Get There?
An education plan that incorporates job skills training could take the following form:
Elementary School (PreK – 6th grade). Provide a firm foundation in reading and math skills that prepare students for the next steps in their education. In fifth and sixth grade, introduce general career choices for students to consider.
Middle School (7th and 8th Grade). Broaden curriculum into other education areas such as science and history, and also introduce specific career path opportunities to students to form a basis for potential career choices.
High School (9th and 10th grade). Students should start making choices on specific career paths and learning the details about these choices.
High School (11th and 12th grade). Involve students in off-campus work/study programs, internships, and job training programs in addition to classroom learning programs in their specific fields of interest.
Present a Broad Array of Choices
One criticism of CUSD is that they are too narrowly focused on a university education as the preferred, if not only, goal of a graduate. Career counselors typically do not present other options as equally beneficial to students. This ignores the reality that not all students are suited for a university education and not all good-paying jobs require a university degree. There are also some university degree options that have rather doubtful economic value to students. They can then become saddled with excessive student debt and little opportunity for reasonable job prospects.
In addition to a university education, other suitable options that should be presented to students are:
Trade Schools. There is a significant shortage of skilled trade workers. These are often well-paying jobs with detailed training programs. Students typically complete these programs with no debt and have a good job waiting for them.
Technical Certificate Programs. The technology field moves very quickly. In order to keep pace, many technology companies often offer their own certificate programs specific to their technology, such as application development, database management, cybersecurity, and network management. These are the jobs of the future.
Military Enlistment. Some of the best technical skills training is provided by the military. They are very proficient at taking young people from all types of backgrounds and training them in complex operations.
Keeping Students Engaged and Motivated
One of the common complaints heard from parents and teachers is the challenge to keep their kids engaged and motivated. Igniting a student’s interest in a career path early on in their education may help them be more keenly aware of their purpose for being in school. Students who typically ask the question “Why am I here?” or say things like “This is boring” would have a clear and immediate reference to the purpose of being in school and participating. The goal changes from just merely “graduating” to “I have a plan after graduation, and I know what I need to do to realize it.”
K-12 education is sometimes regarded as a monolithic entity unto itself with tenuous connections to continuing activity after graduation. Perhaps it should be regarded as just one part of a journey of a student’s development into a productive adult.
Partnering with Other Education Entities
Effective cooperation with other educational entities, such as the East Valley Institute of Technology, Trade Schools, and Community Colleges that offer critical opportunities is the key to developing the pathway to successful careers for our students. However this can be hampered by interagency squabbles, mostly about control and funding since there is a lot of money involved here. Which entity “owns” the kid and the funding that comes with that kid is often a serious point of contention. These obstacles need to be removed for there to be effective cooperation between these entities. This may require some legislative fixes since funding rules and regulations come primarily from State statutes. But when it’s all said and done, these fixes shouldn’t be about the institution’s best interests. They should be about the student’s best interests.
Partnering with City Government and Local Businesses
The City of Chandler also has a keen interest in the availability of a skilled workforce as an integral part of their economic development plans. Companies will be reluctant to locate here if they cannot hire the employees they need to operate their facilities. The City should be sharing critical information on projected workforce needs to help CUSD develop useful programs and for students to better understand what opportunities are available to them. Local business hiring managers should frequent the schools to talk to students and explain the expectations for when they eventually enter the workforce. This should also help connect students to the business community outside the classroom and expand their perception of the very real world that awaits them after they graduate.
So, What Is the Purpose of Education?
Schools should be more than just “babysitting” duty or fulfilling a state-mandated curriculum. There must be tangible and well-defined goals that engage our students and develop a sense of purpose in them. Teachers may find it useful to help motivate students if those students more clearly understand why they are in school and what the intended result of their education is. It’s time to redefine the purpose of public education as the process of producing capable adults who can effectively participate in the economic activity of the community.
Kurt Rohrs is a candidate for the Chandler Unified School District Governing Board. You can find out more about his campaign here.
