Schweitzer Engineering Laboratories

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Jul 22, 2022

Chipping Away at Our Economic and Political Freedom

The letter below was written by Dr. Edmund O. Schweitzer III, SEL president and chief technology officer, in response to the Creating Helpful Incentives to Produce Semiconductors or the CHIPS Act.Chipping away at our economic and political freedomMotivated by semiconductor chip shortages, brought about by COVID lockdowns and too-lean inventories, politicians of both parties want to help foster more chip manufacturing here at home.President Reagan, during his first inaugural and when our country was facing crippling inflation, taught us, “Government is not the solution to our problem, government is the problem."Many years later, his Democratic successor President Clinton boldly stated during his State of the Union address that, “The era of Big Government is over.”Now more than ever, their successors in both the executive and legislative branches of the federal government should take heed of this bipartisan advice.Unfortunately, their tools of choice all too often are more subsidies and a bigger government…rather than understanding the root causes of industry moving out of the United States.The CHIPS Act wastes money.
  1. Money we must print…it’s inflationary.
  2. Money generally going to large and profitable companies, at least one of which said they don’t need it.
  3. Money going to more government…new federal labs, new federal efforts to set industrial policy.
  4. Money taxing us all directly, through inflation, and through redirecting resources to where bureaucrats want it to go. Not you or me, not investors, but government.
The roots of our company are using microprocessors and digital signal processing to protect, control, and meter electric power systems. At its beginning (1984), virtually every semiconductor was manufactured here at home. I chose parts with that in mind. We are very concerned about where our components come from, but we can’t support the CHIPS Act.Today a semiconductor chip has more stamps on its passport of process than most of us see in years of traveling.  Making the chips themselves is only one part of the chip supply process.But subsidies and more government won’t fix a thing—it will only make it worse!What should we do about critical and strategic things? After all, most everything is strategic, not just chips: food, pharmaceuticals, energy, building materials, steel, aluminum, other metals, manufactured goods of all sorts, and so on.We can’t subsidize everything…or can we?YES WE CAN!
  1. Our founding fathers got it right: a federal government with specific, enumerated, limited powers; the rest is up to the states. Inalienable rights to life, liberty, and the pursuit of happiness.
  2. Let’s return to those first principles.
  3. Abandon the path that other countries are taking, and believe in ourselves.
  4. Lower taxes, reduce regulations, accelerate the government we need.
  5. Make it easier to build a house, dig a hole, start a business, mine and refine metals and minerals, grow our food, make our fertilizer, manufacture our chips, drugs, cars, everything.
  6. Produce our own safe, reliable, and economical energy from all available sources.
Continuing the follies of more government, subsidies, mandates, regulations will only push us further down the list of countries in the Index of Economic Freedom (produced by the Heritage Foundation annually). Not too long ago back in 2008, the U.S. was ranked number five on the list and sadly through the years, we have sunk to the 25thposition—behind Great Britain—the very country we won our economic and political freedom from.We’ll continue sinking if we follow our current course.However, if we end the follies, we’ll rise back up, and we’ll reap the benefits. Manufacturing will prosper, return home, emerge from creative minds…supported by investment in the American dream.Our economy will prosper, and so will the environment, as those go together hand in hand.So will our government’s ability to do its job, laid out so beautifully and simply for us in our Constitution.Please join hands in standing up for our economic and political freedom, and push back on subsidies and more government, including the so-called CHIPS Act.We’ll all benefit from the innovations stemming from individuals’ minds, turning into inventions and products, developed and manufactured in America.–Edmund O. Schweitzer III
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