Joe Biden’s chips choices undermine bipartisan industrial initiatives

Joe Biden has done an impressive job of undermining his own approach to governance in recent months. On a number of fronts, bipartisan policy has granted the federal government new authority to address some vital national problem, and each time the White House has made a point of subverting that authority and discrediting the argument that government could ever use it well.

The most recent example comes in the implementation of the Chips and Science Act, which called for more than $39bn in subsidies to support construction of domestic capacity for semiconductor manufacturing. In long-awaited guidance, the Department of Commerce announced an outlandish set of requirements for companies hoping to use the subsidies, most notably that they had to have plans to ensure affordable childcare for their workers. Any firm that considered childcare vital to hiring construction workers already had the option to offer it. But imposing a mandate on firms that didn’t see a need seems antithetical to the goal of bolstering semiconductor competitiveness.

The Biden administration’s decision is not only counterproductive with respect to chip capacity, but also an embarrassment for the broader effort to re-establish the American tradition of industrial policy. Critics warn that even if a public boost for manufacturing is worthwhile in theory, it will become a political boondoggle in practice. The president appears determined to prove the critics right, sharply reducing the chances of bipartisan support for exactly the sort of policy he claims should be a priority.