As if $30 trillion in national debt isn’t isn’t plenty stimulus, here we go again with the spending, on science and technology this time.
The latest attempt is H.R. 4521, the America COMPETES Act, which stands for “America Creating Opportunities for Manufacturing, Pre-Eminence in Technology, and Economic Strength Act.”
America COMPETES already was in the move but is being elevated in the House of Representatives in part given the failure to pass Biden’s Build Back Better “human infrastructure” plan, as the administration is seeking new vehicles, legislative and regulatory, to enact pieces of it and other related priorities.
It is not sufficient to merely stop this bill. Rather than passing legislation like America COMPETES, the already enacted bipartisan infrastructure bill, or Biden’s still in play but ventilated human infrastructure Leviathan, Congress needs to focus intently on legislation preventing the passage of these very kind of bills, and putting to an end the political predation that they embody, which, in today’s climate, means their passage being rationalized by pandemic recovery.
Needed instead is a separation of tech and state.
This House bill is the answer to the Senate version passed last June (68-32), called the U.S. Innovation and Competition Act (itself having itself been previously known as the Endless Frontier Act).
Both versions lead with addressing semiconductor research and competition with China; each embeds the “CHIPS Act” pushed by the Commerce Department, which itself issued a 2021 review of “building resilient supply chains” and “revitalizing American manufacturing.” CHIPS stands for “Creating Helpful Incentives to Produce Semiconductors for America Fund,” and its would fund tens of billions of dollars in semiconductor research.
Fronting this push, Biden in January hosted a White House event alongside the CEO of Intel, which is itself investing billions in an Ohio semiconductor facility. A statement from Biden and Kamala Harris touted a “whole of government” approach to “securing these critical investments,” addressing supply chain issues and reliance on foreign production, and advancing America’s competitive position. Senators from both parties boosting this initiative call it a “once-in-a-generation investment in American science, technology and innovation to help the U.S. preserve its competitive edge.”
The House bill, while cutting billions in scientific research compared to the Senate-passed one, wades into liberal social and cultural agenda items and programs amid its 2,912 pages, and would add more energy, climate and environmental provisions and offices to govern it all to the federal Leviathan. Sen. Chuck Schumer and House Majority Leader Nancy Pelosi need to reconcile the differences.
The COMPETES Act push comes on the heels of trillions in spending that has already occurred in the CARES Act, the American Rescue Plan and the bipartisan Infrastructure Investment and Jobs Act, such that the cynical might rename it the CONCEITS Act.
Biden is in the midst of a national tour for the Infrastructure and Jobs Act, for which the White House just circulated a 12 chapter, 460-page guidebook covering 375 programs the federal government is funding in climate, energy, transportation, and broadband.
All this spending and expansion of the federal government, atop which our leaders would lay the America COMPETES Act and doubtless its own accompanying guidebook, has massive, ignored regulatory effects. Trillions in government spending (”investment”) have altered and will alter the entire trajectory and competitive environment of industries engaged in large-scale enterprises and transactions. This removes vast swaths of business activity from free competitive enterprise altogether, and creates displacements and distortions such that the restoration of free enterprise becomes a near-impossible disentanglement.
The result is, after 100 years of big government and seduction of and fusion with big business, the greatest endeavors—from infrastructure to artificial intelligence, from smart cities to space—now consist of “partnerships” with governments rather than free enterprise, at scales and at costs so gigantic they can only be ignored.
Biden keeps talking about “inflection points” requiring that the federal government do this or that, but how long until everything bends back in on itself and collapses with all this incompetent central government intervention. To borrow another pushbutton Biden phrase, “That’s not hyperbole.” We can’t even rely on the central government to make breezy masks, Covid test kits, or paperclips for that matter.
Among other kinds of economic liberalization, it makes vastly more sense to boost the competition invoked in the America COMPETES by abolishing antitrust regulation so that ordinary present and future enterprises can attain they scale they need to accomplish what everyone now seems to thinks only an even larger central planner must do politically. As it stands, the COMPETES Act contradicts Biden’s simultaneous “competition policy” in which he attacks large firms while calling himself a “capitalist.”
The Republican Study Committee put together a seven-pager on the House Democrats’ bill, noting provisions going far beyond boosting international competition and instead advancing Biden’s climate extremism, including implementing the Paris Climate Treaty, paying out climate change foreign aid, authorizing the military to response to climate crisis, and more spending on clean energy and solar.
But wait, there’s more: Reason‘s Elizabeth Nolan Brown notes that the bill also addresses “Chinese fentanyl production, e-commerce platform liability, misinformation in foreign media, global wildlife trafficking, legal conventions in Pacific Island nations, Arctic mammal rescue capabilities, coral research, and the origins of the COVID-19 virus,” [kudos on the latter] plus the likes of banning shark fin sales and “promoting the consumption of certain types of seafood.
This modern incarnation of America COMPETES is aimed at advancing the left’s domestic forever wars, but the title and the “boosting competitiveness” payouts have been enacted in the past. Earlier iterations did not sport the same slate of social, cultural, and energy and climate agenda items as this new 2,900 page incarnation, but the pedal tone of the urgency of spending taxpayer dollars to boosting technology (and labs and factories back in the home state) is far from cutting edge. The beats are not new.
As our founder Fred L. Smith would say, and as I told the House Science Committee when I testified on yesteryear’s version of this bill, it’s not the job of government to pick the winning racehorses (technologies), but the improve the track (the business, legal and regulatory environment) so that all the horses can run faster.
The good news is most of America’s wealth has not been created yet. But the nation’s unexploited potential will be undermined not advanced by meddling like that contained in COMPETES and BBB. Policymakers need to recognize not just the limitations but the damage caused by the dominant politically driven research and development approach compared to what capital markets and economic liberalization can achieve. When it comes to the creation of knowledge, and of scientific and infrastructure wealth, boosting competitive approaches will be more nimble and effective than political ones at advancing innovation, facilitating commerce, securing supply chains, unleashing sensible clean energy, enhancing consumer well-being and safety, and contributing to the rise of an unprecedented prosperity and global competitive prominence for the United States.
Read the full article at Forbes.