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IP: Sorry for the flood but catching up --Cypress' TJ Rodgers to Congress: Eliminate corporate welfare
From: Dave Farber <farber () cis upenn edu>
Date: Sun, 04 Jul 1999 10:03:21 -0400
Date: Thu, 01 Jul 1999 13:02:28 -0400 From: Declan McCullagh <declan () well com> [But of course they won't listen. I got this in MS Word format from Rodgers' staff and converted it to text. For space reasons I am not attaching the appendices. This was presented in written form yesterday; Rodgers did not testify in person. --Declan] U.S. HOUSE OF REPRESENTATIVES COMMITTEE ON THE BUDGET June 30, 1999 ELIMINATE CORPORATE WELFARE WRITTEN STATEMENT OF T.J. RODGERS PRESIDENT AND CEO CYPRESS SEMICONDUCTOR CORPORATION SAN JOSE, CA 95134-1599 EXECUTIVE SUMMARY § The list of unproductiveand sometimes even ludicrous^Óinvestments in governmentindustry partnerships,^Ô unnecessary subsidies and outright gifts to America's corporations by our government, is long, shameful, and very well documented. (Appendix A contains a description of wasteful technology subsidies and a statement of 78 Silicon Valley executives calling for an end to corporate subsidies.) § What^Òs lacking is not another regurgitation of the evils of corporate welfare, but a Congress and president with the courage to do something about it. § Stereotypes of our political parties would lead one to believe that corporate welfare is the darling of Republicans, and under attack by Democrats. But, my direct experience in testifying on corporate welfare before the House of Representatives and Senate on five occasions over a 10year period is that Democrats and Republicans are equally to blame for the shameful corporate giveaways. (On one occasion, I was personally attacked by Rep. Herbert Klein, DN.J., and was so offended that I offered to fly at my expense to New Jersey during the next election to campaign on behalf of his opponent: ^ÓNew Jersey voters, I am a Silicon Valley CEO who says ^Ñno^Ò to corporate welfare, but your congressman insists on taxing you and sending your money to Silicon Valley.^Ô) § Most Silicon Valley chief executive officers are deadset against corporate welfare, even if it means their companies would lose government funds. (In the same congressional session in which Rep. Klein impugned my integrity and motives, Silicon Valley Rep. Anna Eshoo, DCalif., condescendingly told the committee that she was more in touch with the desires of Silicon Valley companies than I, and that Silicon Valley did want government funding. Consequently, on my fifth trip to Congress, I took only one day to gather the signatures of 78 Silicon Valley CEOs on a statement declaring unequivocally that they did not want corporate welfare.) § I am the vicechairman of the Semiconductor Industry Association, which represents the vast majority of silicon production capability in the United States. The SIA is on record opposing government subsidies for the semiconductor industry. § Corporate welfare persists because many companies outside the semiconductor business, unlike most Silicon Valley companies, make a handsome living at the taxpayers expense. For example, General Electric is a large recipient of corporate welfare, and its CEO, Jack Welch, refused to sign our petition to Congress to end corporate welfare. § Archer Daniels Midland of Iowa rakes in approximately $400million a year in government subsidies of different types and earmarks part of that money for political activities focused on keeping its government funding. ADM is a big campaign contributor and a heavy funder of Sunday morning political television programs. One reason Congress has chosen consistently not to act on corporate welfare is that the states and the congressmen that represent them benefit from it. The situation is very similar to the scattering of military bases (and expenditures) around the country not for strategic, but for political reasons. § Much of the corporate welfare these days comes under the ^Ótechnology^Ô heading. Trendy politicians for example, have taken on the Internet as a second deity. Many, if not most, government technology giveaways are unproductive or even wasteful. (See Appendix A for the story about semiconductor wafers grown in space at a cost of hundreds of millions of dollars with no conceivable benefit to our industry. Or check the Advanced Technology Program (ATP) proposal to request government funds for a project to reengineer cotton fibers to make them more like polyester.) § The unfortunate aspect of wasteful government technology largess is that it is currently drying up funding for the worthy cause of teaching hard science at our universities. At the same time the government is putting porkbarrel money into dubious corporate projects, we have a critical shortage of engineers and scientists so bad that it threatens hightechnology growth. To alleviate this problem in Silicon Valley, Stanford University is currently trying to raise $300 million to create funded scholarships for science and engineering graduate students. Although Stanford certainly would not agree, I think their potential loss of government funding will be ultimately beneficial: In the long run, it will free the university system from government curriculum dictates. § In general, I believe that Silicon Valley has created its wealth and miracles precisely because its chief executives refuse to engage in the competition for porkbarrel funding and rarely engage in timeconsuming political activities. We watch after our businesses, and value winning in the marketplace over using the force of government (subsidies, tariffs, quotas, antitrust activities, etc.) to beat our competition. The current Microsoft antitrust litigation is an unfortunate and rare counterexample. See Appendix B for a detailed description of the diametrically opposed philosophies driving Silicon Valley and Washington.) § Over the last 10 years, I have traveled at my company^Òs expense on five occasions to testify before either the House of Representatives or the Senate on the wastefulness, destructiveness, and unfairness of the corporate welfare system. I have not been well received. After I prepared for hours and travelled for a day to testify, Sen. Howard Metzenbaum, DOhio, arbitrarily cut my testimony to three minutes. At the same hearing, the only other committee member present, Sen. Patrick Leahy, DVt., didn^Òt seem to appreciate my message against Sematech, a chip industry giveaway he supported; he did not greet me, thank me for my testimony, or even look up once from his reading material during my testimony. I gave my last two presentations on corporate welfare to a nearly empty room with only one committee member in attendance. Consequently, I now believe that I am an actor in a play that waxes eloquent about cutting corporate welfare but has no last act. § If this committee is serious about eliminating corporate welfare, what to do is strikingly simple: put all porkbarrel projects in a single package and have a vote, yea or nay, to eliminate corporate welfare across the board, once and for all. It^Òs that simpleand that hard. L1412tjr.doc -------------------------------------------------------------------------- POLITECH -- the moderated mailing list of politics and technology To subscribe: send a message to majordomo () vorlon mit edu with this text: subscribe politech More information is at http://www.well.com/~declan/politech/ --------------------------------------------------------------------------
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- IP: Sorry for the flood but catching up --Cypress' TJ Rodgers to Congress: Eliminate corporate welfare Dave Farber (Jul 04)