Washington is ready to unleash an unprecedented $52 billion to support the domestic microchip industry — and a startling array of companies are angling for a payday, some with an unclear connection to microchips.
Among them are labor unions, the social media company Snap, FedEx, home heating and cooling companies, cryptocurrency exchange Coinbase and even the American Israel Public Affairs Committee, according to lobbying filings from the last three months of 2022.
That’s how Brendan Bordelon and Caitlin Oprysko begin their Politico story about the gold rush created by the CHIPS and Science Act. But never fear, it’s not like the big companies are being left behind:
…the bulk of the money is expected to go to established semiconductor giants like Intel and Samsung.…
the five top U.S. tech companies — Meta, Microsoft, Google, Amazon and Apple — all lobbied on CHIPS and Science implementation in the last three months of 2022.…
Top defense contractors like Northrop Grumman and General Dynamics paid lobbyists to work on the law. So did HVAC companies like Carrier and Trane.…
Massive labor unions, including the AFL-CIO and the Communications Workers of America, have lobbied on the law’s implementation.
And on and on.
This is of course the standard story whenever Congress appropriates, or considers appropriating, a new pot of taxpayers’ money. The civics books explain that the people bring a problem to Congress, committees hold hearings and hear from expert witnesses, the issue is debated, Congress then maybe appropriates the money, and selfless experts in the bureaucracy spend it in the national interest. The reality is more like a feeding frenzy to get a piece of every new funding opportunity. As my colleague Scott Lincicome told Politico, “It would almost be corporate malpractice to not go after that cash.”
It’s not just the CHIPS Act. The New York Times reported in November,
These days, [Commerce Secretary Gina] Raimondo, a former Rhode Island governor, is the most important phone call in Washington that many chief executives can make. As the United States embarks on its biggest foray into industrial policy since World War II, Ms. Raimondo has the responsibility of doling out a stunning amount of money to states, research institutions and companies.
I recall noting previously that total reported spending on lobbying peaked in 2009 and 2010, the first two years of President Barack Obama’s administration, when trillions of dollars were being handed out or moved around by the stimulus package, the omnibus spending bill, the Dodd‐Frank financial regulation bill, the Affordable Care Act, and an ultimately unsuccessful 1200‐page energy bill stuffed with taxes, regulations, loopholes, and subsidies. The Washington Post found that “more than 90 organizations hired lobbyists to specifically influence provisions of the massive stimulus bill.” Now I see that lobbying expenditures fell a bit later in the Obama administration, rose when a new administration with new priorities took office, and are now reaching new highs in the spendaholic Biden administration.
As Craig Holman of the Ralph Nader‐founded Public Citizen told Marketplace Radio during the financial crisis, “the amount spent on lobbying … is related entirely to how much the federal government intervenes in the private economy.”
Marketplace’s Ronni Radbill elaborated: “In other words, the more active the government, the more the private sector will spend to have its say…. With the White House injecting billions of dollars into the economy [in early 2009], lobbyists say interest groups are paying a lot more attention to Washington than they have in a very long time.”
Big government means big lobbying. When you lay out a picnic, you get ants. And today’s federal budget is the biggest picnic in history.
The Nobel laureate F. A. Hayek explained the process 80 years ago in his prophetic book The Road to Serfdom: “As the coercive power of the state will alone decide who is to have what, the only power worth having will be a share in the exercise of this directing power.”
That’s the worst aspect of the growth of lobbying: it indicates that decisions in the marketplace are being crowded out by decisions made by lobbyists and politicians, which means a more powerful government, less freedom, and less economic growth.
