Domestic Tranquility — The Importance of Government Initiatives for American Made Products
The CHIPS Act is a good start, but there's much work to be done in other industries to encourage domestic production.
Two years ago, when gasoline prices were in the $2.20 range, I thought how fortunate I was, not to mention everyone else, that a staple of modern life wasn’t just affordable, but a decent bargain. Then, of course, came the climb, when gasoline prices in Colorado and other locales shot up above $5 a gallon, even $5.50, and on the west coast where my daughter lives, the price at the pump soared to as much as $7 a gallon. In July the price, in spite of a 40-year spike in inflation, was down in the mid-$4 range, and I remember stopping by a station near where I live that was posting $4.17! I was ecstatic. I wanted to go inside the station and thank them.
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But then I read the news that the giant oil companies, like Exxon Mobil, Chevron and Shell, reported record profits for the second quarter of this year, aided by massive increases in gasoline and natural gas, both commodities affected by Russia’s war in Ukraine, or so they say. I ceased being thankful for recent price drops in that obviously, while everyone in the country and the world feels the negative impacts of the global economy set off by war and supply chain issues, the providers of those products didn’t seem to share in the misery.
Somehow that doesn’t seem fair. Over the years I have maintained a relatively conservative approach to domestic oil exploration because I believe(d) the benefits of energy independence outweigh the negative impacts of such domestic exploration. Since we’re nowhere near ending our dependence on fossil fuels for heating, cooling and transportation, my belief is that we should continue fossil development – and work on and invest diligently in eco-friendly alternatives – until such time that our dependence on oil and gas goes away. And it will, sooner rather than later. In return for such forbearance, however, the oil companies should at least focus their attentions on providing such commodities to the U.S. in ample supplies, at a fair price and a reasonable profit margin. They are not doing so.
This situation got me thinking about domestic development and investment in a whole range of products that could and should be made in the United States.
Interestingly enough, just recently my Korean-made refrigerator, a Samsung, went on the fritz, and in searching for an appliance repair service, I was horrified by the number of them that just flat-out said, “We don’t service Samsung and LG (another Korean appliance maker).” They only work on domestic brands, like Frigidaire, Westinghouse, GE, Whirlpool and Maytag – many of which, to be fair, are also manufactured overseas but apparently better supported domestically. Turns out my only choice was to buy a new fridge, and in visiting the major box stores that sell appliances I discovered that while they sell both Samsung and LG, none of the staff there recommends them. Yet another example, it seems to me, to favor domestic development and manufacturing.
Then in July came the news of the bi-partisan passage in Congress of the CHIPS Act, legislation designed to boost – with government subsidies for domestic manufacturing development – the production of electronic microchips on U.S. soil and to make our country more competitive with, and less reliant on, China. CHIPS stands for Creating Helpful Incentives to Produce Semiconductors and Science Act, and the law will put some $52.7 billion in subsidies directly into U.S. computer chip manufacturing, and then another $230 billion+ into a variety of domestic-focused development of science and technology that is now being imported – with some of that investment to federal laboratories and businesses right here in Colorado.
CHIPS is designed to answer the shortages that beset us in obtaining microchips from foreign sources with their whims and spurious economies, but why stop there? Why not a CHIPS-like act to do the same for shoes, tractors, televisions, mobile phones, apparel, furniture, food, building materials – and, yes, even refrigerators? And subsidies for training American workers for high-paying jobs. After all, our founding fathers, in the Preamble of the U.S. Constitution, said we should “insure domestic tranquility” to secure “the blessings of liberty.”
I’m all for domestic tranquility.
Jeff Rundles is a former editor of ColoradoBiz and a regular columnist. Email him at email@example.com.