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]
>
>
>
> U.S. HOUSE OF REPRESENTATIVES
>
> COMMITTEE ON THE BUDGET
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>
>
>
>
> June 30, 1999
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>
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> ELIMINATE CORPORATE WELFARE
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> 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
>
>
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