IP: Sorry for the flood but catching up --Cypress' TJ Rodgers to Congress: Eliminate corporate welfare

[Dave Farber <farber@cis.upenn.edu>]

>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]
>
>
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>U.S. HOUSE OF REPRESENTATIVES
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>COMMITTEE ON THE BUDGET
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>June 30, 1999
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>ELIMINATE CORPORATE WELFARE
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>WRITTEN STATEMENT OF T.J. RODGERS
>
>PRESIDENT AND CEO
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>CYPRESS SEMICONDUCTOR CORPORATION
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>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
>
>
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