US State Governments Try Lavishing Subsidies to Attract Chip and EV Factories (go.com) 8
U.S. states are now "doling out more cash than ever to lure multibillion-dollar microchip, electric vehicle and battery factories," reports the Associated Press, "inspiring ever-more competition as they dig deeper into their pockets to attract big employers and capitalize on a wave of huge new projects."
Georgia, Kansas, Michigan, New York, North Carolina, Ohio and Texas have made billion-dollar pledges for a microchip or EV plant, with more state-subsidized plant announcements by profitable automakers and semiconductor giants surely to come. States have long competed for big employers. But now they are floating more billion-dollar offers and offering record-high subsidies, lavishing companies with grants and low-interest loans, municipal road improvements, and breaks on taxes, real estate, power and water....
The projects come at a transformative time for the industries, with automakers investing heavily in electrification and chipmakers expanding production in the U.S. following pandemic-related supply chain disruptions that raised economic and national security concerns. One of the driving forces behind them are federal subsidies signed into law last summer that are meant to encourage companies to produce electric vehicles, EV batteries, and computer chips domestically. Another is that states are flush with cash thanks to inflation-juiced tax collections and federal pandemic relief subsidies. The number of big projects and the size of state subsidy packages are extraordinary, said Nathan Jensen, a University of Texas professor who researches government economic development strategies.
"It is kind of a Wild West moment," Jensen said. "It's wild money and every state seems to be in on it."
Many of the companies drawing the biggest subsidy offers — such as Intel, Hyundai, Panasonic, Micron, Toyota, Ford and General Motors — are profitable and operate around the globe. Some lesser-known names in the nascent EV field are getting big offers too, such as Rivian, Volkswagen-backed Scout Motors and Vietnamese automaker VinFast. The subsidy offers are generally embraced by politicians from both major parties and the business elite, who point to promises of hundreds or thousands of jobs, massive investments in construction and equipment, and what they contend are immeasurable trickle-down benefits.
Still, academics who study such subsidies find them to be a waste of money and rarely decisive in a company's choice of location.
The projects come at a transformative time for the industries, with automakers investing heavily in electrification and chipmakers expanding production in the U.S. following pandemic-related supply chain disruptions that raised economic and national security concerns. One of the driving forces behind them are federal subsidies signed into law last summer that are meant to encourage companies to produce electric vehicles, EV batteries, and computer chips domestically. Another is that states are flush with cash thanks to inflation-juiced tax collections and federal pandemic relief subsidies. The number of big projects and the size of state subsidy packages are extraordinary, said Nathan Jensen, a University of Texas professor who researches government economic development strategies.
"It is kind of a Wild West moment," Jensen said. "It's wild money and every state seems to be in on it."
Many of the companies drawing the biggest subsidy offers — such as Intel, Hyundai, Panasonic, Micron, Toyota, Ford and General Motors — are profitable and operate around the globe. Some lesser-known names in the nascent EV field are getting big offers too, such as Rivian, Volkswagen-backed Scout Motors and Vietnamese automaker VinFast. The subsidy offers are generally embraced by politicians from both major parties and the business elite, who point to promises of hundreds or thousands of jobs, massive investments in construction and equipment, and what they contend are immeasurable trickle-down benefits.
Still, academics who study such subsidies find them to be a waste of money and rarely decisive in a company's choice of location.
They're publicly traded companies (Score:2)
My taxpayer dollars are the most valuable dollars in the world because they are guaranteed money train. If we're going to give my taxpayer dollars away I want something in return and in the corporate world that's something is stock
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A better method would be to mandate the companies give stock to the states providing the socialist, er, taxpayer money. Nothing large. Let's say 1% of all outstanding stock. Or, if the whiners think that's too much, stock equivalent in value to the amount of money they receive.
Granted, this sends us down the path of fascism, but considering where we're at now, there isn't much difference.
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Pretty sure we're already there, thanks to the Citizens United decision.
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Governments are already free to purchase as much stock as they desire. Most already do in order to fund their pension plans.
And businesses are free to use banks to get loans for their money rather than having the taxpayers foot the bil. Many already do in order to fund their business plans.
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You've managed to successfully reason out that your taxes will be wasted on crap you don't want because large corporations can influence politicians to spend money that isn't their own. Perhaps you'll be able to further extend this to other areas of government spending. You don't g
Corporatism (Score:2)
"... every state seems to be in on it."
Corporatism at its best: How many of these states offering far-right (since EVs still won't be available to everyone) socialism, also claim to practice 'small government'?
Subsidies, huh? (Score:1)