In the News: The America COMPETES Act

I’m quoted, though inaccurately, in a Voice of America article on the America COMPETES Act:

Ryan Young, a senior fellow with the Competitive Enterprise Institute, told VOA that efforts by Congress to mimic China by trying to manipulate the U.S. economy are “misguided” at best, and at worst destructive.

“This falls into what I think of as the ‘But they do it, too,’ argument,” Young said. While it is indisputable that the Chinese government creates all sorts of advantages for certain sectors within its economy, he said, it doesn’t follow that the answer is for the U.S. to do the same.

Despite government support, large Chinese tech firms are burdened with substantial debt, operational inefficiencies and political meddling, he said.

Further, Young noted that the semiconductor industry, which the legislative efforts target above all else, has already taken steps to bring some of its production into U.S. territory, with chip giant Intel expanding a $50 billion complex of chip manufacturing facilities in Arizona.

I should have been more clear in explaining to the reporter that subsidies are harmful, even in China. Subsidized companies grow soft and dependent, and tend to operate with politics in mind, rather than customers or investors. The result is waste, corruption, and white elephants, along with slower innovation. The more subsidies in an economy, the less competitive it becomes, especially in the long run. Congress should not copy China’s mistakes.

The whole article is here.

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