Research

More stories

  • 113 Shares99 Views

    in Economy

    Silicon Valley Chosen for $4 Billion Chip Research Center

    by

    Anticipating federal subsidies, Applied Materials said it planned to invest up to $4 billion in the semiconductor project in Sunnyvale, Calif.Silicon Valley got its name from computer chips, but no longer plays a central role in shaping how they are made. A major supplier to the industry hopes to change that.Applied Materials, the biggest maker of machines for producing semiconductors, said on Monday that it planned to build a massive research facility near its hometown, Santa Clara, Calif., to allow chip makers and universities to collaborate on advances to make more powerful chips. Silicon Valley hasn’t seen a comparable semiconductor construction project in more than 30 years, industry analysts say.The company expects to invest up to $4 billion in the project over seven years, with a portion of that money coming from federal subsidies, while creating up to 2,000 engineering jobs.The plan is the latest in a string of chip-related projects spurred by the CHIPs Act, a $52 billion package of subsidies that Congress passed last year to reduce U.S. dependence on Asian factories for the critical components. What sets Applied Materials’ move apart is that it focuses on research, rather than manufacturing, and is a substantial new commitment to the industry’s original hub.Chip makers that grew up in Silicon Valley have long chosen to build new “fabs,” the sophisticated factories that fabricate chips from silicon wafers, in less costly states and countries. But Applied Materials is betting that technical talent at nearby universities and the local companies that design chips will spur innovation quickly, making up for cost differences with other locations.“You can connect more leaders in this ecosystem here than anyplace in the world,” said Gary Dickerson, the chief executive of Applied Materials. “There’s no place like this.”Applied Materials has scheduled an event on Monday in Sunnyvale, Calif., to discuss the project, with expected guests including Vice President Kamala Harris.Politicians from both parties overwhelmingly supported the CHIPs Act, partly out of fears that China will one day exert control over Taiwan and factories there that produce the most advanced chips. Besides encouraging domestic chip manufacturing, the legislation allocated about $11 billion to spur related research and development.Chip research now takes place in several phases in multiple locations, including university labs and collaborative centers such as the Albany NanoTech Complex in New York. Applied Materials participates with other companies in that center and operates a research fab in Silicon Valley where chip makers can work with its machines and those of other toolmakers.But many of the core chores in developing new production processes are carried out by chip manufacturers in fabs outfitted with a broad array of equipment. The proposed center, which Applied Materials calls Epic, is set to have ultraclean production space bigger than three football fields and is designed to give university researchers and other engineers comparable resources to experiment with new materials and techniques for creating advanced chips.One goal is to reduce the time it takes for new ideas to flow from the research labs to companies designing new manufacturing gear, information that is now often delayed as it is filtered through the chip makers.“The trouble is, those customers need time to figure out what they need,” said H.-S. Philip Wong, a Stanford professor of electrical engineering who was briefed on the company’s plans. “There is a big hole in there.”Applied Materials also said chip makers would be able to reserve space in the center and try out new tools before they were commercially available.The plan hinges partly on whether Applied Materials can win subsidies under the CHIPs Act, which the Commerce Department says has already attracted expressions of interest from more than 300 companies. Mr. Dickerson said that the company planned to build the center in any case, but that government funding could affect the project’s scale.Assuming the center evolves as planned, it could substantially bolster Silicon Valley’s role in the evolution of chips, said G. Dan Hutcheson, vice chair at the market research firm TechInsights.“It really is a vote of confidence for the Valley,” he said. More

  • 125 Shares179 Views

    in Economy

    Commerce Dept. Outlines Its Bid to Fund Cutting-Edge Chip Research

    by

    The Biden administration announced its strategy for the National Semiconductor Technology Center, a string of facilities aimed at propelling U.S. innovation.WASHINGTON — The Biden administration outlined plans on Tuesday to propel research on the type of cutting-edge microchips needed to power computers, cars and other devices, saying it would establish a new national organization with locations in various parts of the United States.The Commerce Department, which is in charge of the administration’s efforts to revitalize the American chip industry, said its new National Semiconductor Technology Center would bring together companies, universities and others to collaborate on next-generation chip technology. The organization would include a string of research centers, the locations of which have yet to be chosen, and aim to be operational by the end of this year.The organization would help “regain America’s leadership in research and development and technologies of the future, and importantly, make sure we stay there for decades to come,” Gina Raimondo, the commerce secretary, said in a briefing Monday.“It’s a place where industry and academia and start-ups and investors can come together to solve the biggest, grandest challenges and set priorities,” she added.The plans are part of the Biden administration’s effort to reinvigorate semiconductor manufacturing and ensure that the United States has a steady supply of chips necessary to feed its factories and support its national defense. The Commerce Department has been charged with doling out $50 billion to revitalize the industry, including $11 billion devoted to research and development.The technology center is expected to be central to that effort. Some of its locations would be capable of end-to-end manufacturing of new chip designs, while others would focus on experimenting with new materials and equipment, or with new ways of putting chips together to make them more powerful, Ms. Raimondo said.Laurie Giandomenico, the vice president and chief acceleration officer of MITRE, a nonprofit organization that operates federally funded research centers, called the $11 billion investment by the United States “pretty significant,” given that the semiconductor industry has in past years spent about $70 billion on research and development globally.The challenge, she said, would be to ensure that the money was spent to encourage collaborative research to solve the industry’s biggest problems, not the “siloed innovation” now carried out by chip firms that carefully guard their creations from competitors.“It should be on areas that no one company can solve alone,” she said.Companies, universities, lawmakers and local governments have been lobbying the administration to set up an outpost of the new organization in their area. Ms. Raimondo emphasized that the organization would be an independent “trusted” player, with board members appointed by a separate selection committee and strict controls for protecting intellectual property.One of the organization’s primary goals, Ms. Raimondo said, would be making it easier and less expensive for start-ups and other new entrants to develop and commercialize new chip technologies.“We want to cut in half the projected cost of moving a new chip from concept to commercialization over the next decade,” she said.Chris Miller, the author of “Chip War,” which chronicles the industry’s development, said it was comparatively easy for a researcher to develop a new idea for a chip in a laboratory. But given the high cost of producing chips, researchers can have a hard time getting their inventions manufactured.Designing an advanced chip, which may have tens of billions of transistors, can cost hundreds of millions of dollars, according to analysts. The latest systems for defining the smallest circuitry on wafers cost more than $100 million each, while the new factories called “fabs” that make advanced chips can cost $10 billion to $20 billion.“The big fabs are interested in producing 100 million chips for an iPhone, not 10 chips for a professor at M.I.T.,” Mr. Miller said.Venture capitalists also often shy away from investing in chip start-ups because they require more initial funding than other kinds of tech companies and more time to generate a return on that investment.To help address some of these issues, the government’s technology center will establish an investment fund to support start-ups, and provide manufacturing facilities for small players to experiment with new technologies.“I see a world where the U.S. can actually revitalize this microelectronics industry because we could bring down the costs of doing a chip start-up by a factor of five to a factor of ten,” said Gilman Louie, a tech investor and chief executive of a nonprofit investment organization called America’s Frontier Fund.The center’s research priorities are expected to be refined in the coming months. But the Commerce Department specified several areas it would focus on, including advancing the technology for analyzing the microscopic components of chips and setting technical standards for new kinds of chip packaging.As progress slows in squeezing ever-smaller transistors onto each piece of silicon, many companies are now breaking up big products into smaller “chiplets” that are placed side by side or stacked on top of one another.The Commerce Department said that setting new standards for these practices would pave the way for the creation of marketplaces in which companies can assemble new products using chiplets from multiple vendors. More

  • 150 Shares169 Views

    in Economy

    What’s in the CHIPS Act, Aimed at Childcare Expansion and National Security

    by

    A sprawling new program for the semiconductor industry is foremost about national security, but it will try to advance other priorities as well.The Biden administration unveiled rules Tuesday for its “Chips for America” program to build up semiconductor research and manufacturing in the United States, beginning a new rush toward federal funding in the sector.The Commerce Department has $50 billion to hand out in the form of direct funding, federal loans and loan guarantees. It is one of the largest federal investments in a single industry in decades and highlights deepening concern in Washington about America’s dependence on foreign chips.Given the huge cost of building highly advanced semiconductor facilities, the funding could go fast, and competition for the money has been intense.Here’s a look at the CHIPS and Science Act, what it aims to do and how it will work.Funding chip production and researchThe largest portion of the money— $39 billion — will go to fund the construction of new and expanded manufacturing facilities. Another $11 billion will be distributed later this year to support research into new chip technologies.The bulk of the manufacturing money is likely to go to a few companies that produce the world’s most advanced semiconductors — including Taiwan Semiconductor Manufacturing Company, Samsung Electronics, Micron Technology and, perhaps in the future, Intel — to help them build U.S. facilities.Some will go to makers of older chips that are still essential for cars, appliances and weapons, as well as suppliers of raw materials for the industry and companies that package the chips into their final products.While some critics have questioned the wisdom of giving grants to a profitable industry, semiconductor executives argue that they have little incentive to invest in the United States, given the higher costs of workers and running a factory.The Global Race for Computer ChipsU.S. Industrial Policy: In return for vast subsidies, the Biden administration is asking chip manufacturers to make promises about their workers and finances, including providing affordable child care.Arizona Factory: Internal doubts are mounting at Taiwan Semiconductor Manufacturing Company, the world’s biggest maker of advanced chips, over its investment in a new factory in Phoenix.CHIPS Act: Semiconductor companies, which united to get the sprawling $280 billion bill approved last year, have set off a lobbying frenzy as they argue for more cash than their competitors.A Ramp-Up in Spending: Amid a tech cold war with China, U.S. companies have pledged nearly $200 billion for chip manufacturing projects since early 2020. But the investments have limits.The administration does not plan to fund entire projects: Biden administration officials say they plan to offer grants of between 5 to 15 percent of a company’s capital expenditures for a project, with funding not expected to exceed 35 percent of the cost. Companies can also apply for a tax credit reimbursing them for 25 percent of project construction.Limiting foreign dependenceGina Raimondo, the secretary of commerce, describes the program as foremost a national security initiative.While the United States is still a leader in designing chips, most manufacturing has been sent offshore. Today, more than 90 percent of the most technologically advanced chips, which are critical for the U.S. military and the economy, are produced in Taiwan. That has prompted concerns about the supply’s vulnerability, given China’s aggression toward Taiwan and the potential for a military invasion of the island.At the same time, China has increased its market share in less advanced chips that are still critical for cars, electronics and other products. The United States manufactures 12 percent of chips, though none of the world’s most advanced.Chip shortages during the pandemic forced factories to halt work and brought home in a tangible way how vulnerable the supply chain is to disruption. Workers at Ford Motor factories in Michigan and Indiana worked a full week just three times last year because of a chips shortage, Ms. Raimondo said in a speech at Georgetown University last week. That helped create a car shortage and raise the price of cars, stoking inflation.The Commerce Department says the program will also provide the Department of Defense and the national security community with a domestic source of the world’s most advanced chips.An Intel factory under construction in Arizona. The Biden administration unveiled the rules for its program to build up U.S. semiconductor research and manufacturing.Philip Cheung for The New York TimesBuilding chip hubsAccording to Ms. Raimondo, the goal is to build at least two U.S. manufacturing clusters to produce the most advanced types of logic chips, as well as facilities for other kinds of chips, and complex supply networks to support them.Commerce officials have declined to speculate where these facilities might be, saying they must review applications. But chip makers have already announced billions of dollars in plans for new investments around the United States.TSMC, which produces most of the world’s leading-edge chips, has been busy expanding in Arizona, while No. 2 Samsung is growing in Texas. Micron, which makes advanced memory chips, has announced big expansion plans in New York. And Intel, a U.S. technology giant that is investing heavily to try to capture a technological edge, has broken ground on a “megasite” in Ohio.Ms. Raimondo has said the vision is to restore the United States to a position of leadership in semiconductor technology, to the point where every major global chip company wants to have both research and manufacturing facilities in the United States.Still, there is skepticism about how much the program can do. One 2020 study, for example, found that a $50 billion investment in the industry would increase U.S. market share only to 14 percent.Protecting taxpayer fundsThe stakes are high for the Biden administration to prove this foray into industrial policy can work. Critics have argued that the federal government may not be the best judge of winners and losers. If the administration gets it wrong, it could face intense criticism.The Commerce Department said it would look closely at companies that applied for funding, to try to ensure that they were not being given more taxpayer dollars than they needed.In a decision that may irk some companies, the department said projects receiving grants would be required to share a portion of any unanticipated profits with the federal government, to ensure that companies gave accurate financial projections and didn’t exaggerate costs to get bigger awards.The Commerce Department also said it would dole out funding over time as companies hit project milestones, and give preference to those that pledged to refrain from stock buybacks, which tend to enrich shareholders and corporate executives by increasing a company’s share price.Companies are also barred from making new, high-tech investments in China or other “countries of concern” for at least a decade, to try to ensure that taxpayer money does not go to fund new operations in China.But analysts said it remained to be seen how difficult it would be to enforce these provisions. Company finances can be opaque, and when a company saves a dollar in the United States, it may then choose to invest it elsewhere.Helping workers by attaching big stringsThe program also includes some ambitious and unusual requirements aimed at benefiting the people who will staff semiconductor facilities.For one, the department will require companies seeking awards of $150 million or more to guarantee affordable, high-quality child care for plant construction workers and operators. This could include building company child care centers near construction sites or new plants, paying local child care providers to add capacity at an affordable cost or directly subsidizing workers’ care costs. Ms. Raimondo has said child care will draw more people into the work force, when many businesses are struggling in a tight labor market.Applicants are also required to detail their engagement with labor unions, schools and work force education programs, with preference given to projects that benefit communities and workers.Other provisions will encourage companies, universities and other parties to offer more training for workers, both in advanced sciences and in skills like welding. The department said it would give preference to projects for which state and local governments were providing incentives with “spillover” benefits for communities, like work force training, education investment or infrastructure construction.This is part of the Biden administration’s “worker-centered” approach to economic policy, which seeks to use the might of the federal government to benefit workers. But some critics say it could put the program’s goal of building the most advanced semiconductor factories at risk, if it adds excessive costs to new projects. More

  • 138 Shares169 Views

    in Economy

    Biden Signs Industrial Policy Bill Aimed at Bolstering Competition With China

    by

    WASHINGTON — President Biden on Tuesday signed into law a sprawling $280 billion bill aimed at bolstering American chip manufacturing to address global supply chain issues and counter the rising influence of China, part of a renewed effort by the White House to galvanize its base around a recent slate of legislative victories.Standing before business leaders and lawmakers in the Rose Garden, Mr. Biden said the bill was proof that bipartisanship in Washington could produce legislation that would build up a technology sector, lure semiconductor manufacturing back to the United States and eventually create thousands of new American jobs.“Fundamental change is taking place today, politically, economically and technologically,” Mr. Biden said. “Change that can either strengthen our sense of control and security, of dignity and pride in our lives and our nation, or change that weakens us.”The bipartisan compromise showed a rare consensus in a deeply divided Washington, reflecting the sense of urgency among both Republicans and Democrats for an industrial policy that could help the United States compete with China. Seventeen Republicans voted for the bill in the Senate, while 24 Republicans supported it in the House.While Republicans have long resisted intervening in global markets and Democrats have criticized pouring taxpayer funds into private companies, global supply chain shortages exacerbated by the pandemic exposed just how much the United States had come to rely on foreign countries for advanced semiconductor chips used in technologies as varied as electric vehicles and weapons sent to aid Ukraine.Read More on the Relations Between Asia and the U.S.Pelosi’s Taiwan Visit: House Speaker Nancy Pelosi’s trip to Taiwan has exacerbated tensions between the United States and China, which claims the self-governing island as its own. The visit could also undermine the Biden administration’s strategy of building economic and diplomatic ties in Asia to counter Beijing.Reassuring Allies: Amid China’s military exercises near Taiwan in response to Ms. Pelosi’s visit, the Biden administration says its commitment to the region has only deepened. But critics say the tensions over Taiwan show that Washington needs stronger military and economic strategies.CHIPS and Science Act: Congress passed a $280 billion bill aimed at building up America’s manufacturing and technological edge to counter China. It is the most significant U.S. government intervention in industrial policy in decades.In a sign of how Beijing’s rise drove the negotiations for the legislation, Mr. Biden explicitly mentioned China multiple times during his remarks at the bill-signing ceremony.“It’s no wonder the Chinese Communist Party actively lobbied U.S. business against this bill,” the president said, adding that the United States must lead the world in semiconductor production.The bill is focused on domestic manufacturing, research and national security, providing $52 billion in subsidies and tax credits for companies that manufacture chips in the United States. It also includes $200 billion for new manufacturing initiatives and scientific research, particularly in areas like artificial intelligence, robotics, quantum computing and other technologies.The legislation authorizes and funds the creation of 20 “regional technology hubs” that are intended to link together research universities with private industry in an effort to advance technology innovation in areas lacking such resources. And it provides funding to the Energy Department and the National Science Foundation for basic research into semiconductors and for building up work force development programs.“We will bring these jobs back to our shores and end our dependence on foreign chips,” said Senator Chuck Schumer, Democrat of New York and the majority leader, who pumped his fists as he stepped toward the lectern. More

  • 163 Shares119 Views

    in Economy

    Climate Change Is Probably a Drag on Growth, but It’s Unclear How Much

    by

    It’s been hot out there. Like water-main-breaking, train-slowing, corn-scorching, road-buckling hot — not to mention heat’s effects on human bodies, making it harder to work in construction and harvest crops.All of that must be playing into the gross domestic product reading for the second quarter, right?The short answer is yes. The longer answer is that it’s very hard to track that impact in real time, but economists are working on doing it better.For more than a decade, researchers have constructed forecasts of climate change’s likely economic impact. A 2018 paper found, for example, that the annual growth rate of state-level economic output declined 0.15 to 0.25 percentage points for every degree the average temperature crept higher in the summer — which could take up to a third off economic growth over the next century. And that’s just in the United States.Those estimates, however, benefit from long-term data sets that allow analysts to compare the effects of temperature and extreme weather events over time. They also tend to project further into the future, which generally yields more eye-popping outcomes, and is more relevant for evaluating the effects of policy interventions meant to curb emissions.“As a profession, we’ve been really focused on future economic impacts from climate change, because we’ve been focused on how you should be taxing carbon emissions,” said Derek Lemoine, an associate professor of economics at the University of Arizona. “We’ve been less focused on what climate change is doing already, partly because we didn’t realize it would happen this quickly.”But Dr. Lemoine is working on doing exactly that, with the goal of estimating how climate change is affecting the economy at nearly the same time that statistics like G.D.P. are being compiled.Other researchers are working on developing measures of economic growth that integrate not just production of goods and services — which themselves can accelerate climate change — but environmental and social elements as well. More

  • 125 Shares119 Views

    in Economy

    Employer Practices Limit Workers’ Choices and Wages, U.S. Study Argues

    by

    A Biden administration report says collusion and other constraints on competition hold down pay and prospects in the labor market.The recent narrative is that there is a tight labor market that gives workers leverage. But a new report from the Biden administration argues that the deck is still stacked against workers, reducing their ability to move from one employer to another and hurting their pay.The report, released Monday by the Treasury Department, contends that employers often face little competition for their workers, allowing them to pay substantially less than they would otherwise.“There is a recognition that the idea of a competitive labor market is a fiction,” said Ben Harris, assistant Treasury secretary in the office of economic policy, which prepared the report. “This is a sea change in economics.”The report follows up on a promise made by President Biden last summer when he issued an executive order directing his administration to address excessive concentration in the market for work.Drawing from recent economic research, the report concludes that lack of competition in the job market costs workers, on average, 15 to 25 percent of what they might otherwise make. And it emphasizes that the administration will deploy the tools at its disposal to restore competition in the market for work.“This is the administration declaring where it is on the enforcement of antitrust in labor markets,” Tim Wu, a special assistant to the president for technology and competition policy on the National Economic Council, said in an interview in which he laid out the report’s findings. “It is sending a strong signal about the direction in which antitrust enforcement and policy is going.”Across the economy, wage gains generally come about when a worker changes jobs or has a credible offer from outside that will encourage the current employer to provide an increase, argues Betsey Stevenson, a professor of economics at the University of Michigan who was on President Barack Obama’s Council of Economic Advisers.The State of Jobs in the United StatesEmployment growth accelerated in February, as falling coronavirus cases brought customers back to businesses and workers back to the office.February Jobs Report: U.S. employers added 678,000 jobs and the unemployment rate fell to 3.8 percent ​​in the second month of 2022.Wages and Prices: A labor shortage is helping to push up workers’ pay. With inflation running hot, that could be a problem for the Federal Reserve.Service Workers:  Even as employers scramble to fill vacancies, service workers are seeing few gains. Part-time work is partly to blame.Unionization Efforts: The pandemic has fueled enthusiasm for organized labor. But the pushback has been brutal, especially in the private sector.New to the Work Force: Graduating college seniors will start their career without the memory of prepandemic work life. Here is what they expect.“Companies are well aware of this,” she said in an interview, so they rally around a simple solution: “If we just stop competing, it will be better for everybody.”The Treasury report lays out the many ways in which employers do this. There are noncompete agreements that bar workers from moving to a competitor, and nondisclosure agreements that keep them from sharing information about wages and working conditions — critical information for workers to understand their options. Some companies make no-poaching deals.“There is a long list of insidious efforts to take power out of the hands of workers and seize it for employers’ gain,” said Seth Harris, deputy director at the National Economic Council and deputy assistant to the president for labor and the economy.This is happening against a backdrop of broad economic changes that are hemming in the options of many workers, especially at the bottom end of the job market.The outsourcing of work to contractors — think of the janitors, cafeteria workers and security guards employed by enormous specialist companies, not by the companies they clean, feed and protect — reduces the options for low-wage workers, the report argues.The mergers and acquisitions that have consolidated hospitals, nursing homes, food processing companies and other industries have also reduced competition for workers, the study says, curtailing their ability to seek better jobs.The report notes, for instance, that mergers trimmed the number of hospitals in the United States to 6,093 in 2021, from 7,156 in 1975. It cites research into how some of these mergers have depressed the wage growth for nurses, pharmacy employees and other health workers.The Treasury’s document is drawn from a body of research that has been growing since the 1990s, when a seminal paper by David Card and Alan B. Krueger found that raising the minimum wage did not necessarily reduce employment and could even produce more jobs.The conclusion by Mr. Card and Mr. Krueger, which economists would consider impossible in a competitive labor market in which rising labor costs would reduce employer demand, started the discipline down a path to investigate the extent to which employers competed for workers. If a few employers had the power to hold wages below the competitive equilibrium, raising the wage floor might draw more workers in.Lack of competition, the Biden administration argues, goes a long way to explain why pay for a large share of the American work force is barely higher, after accounting for inflation, than it was a half-century ago. “The fact that workers are getting less than they used to is a longstanding problem,” Ms. Stevenson, who was not involved in the Treasury report, noted.Anticompetitive practices thrive when there are fewer competitors. If workers have many potential employers, they might still agree to sign a noncompete clause, but they could demand a pay increase to compensate.Even if there is no conclusive evidence that the labor market is less competitive than it used to be, the report says, researchers have concluded that there is, in fact, very little competition.Suresh Naidu, a professor of economics at Columbia University, argues, moreover, that institutions like the minimum wage and unions, which limited employers from fully exercising their market power, have weakened substantially over time. “The previously existing checks have fallen away,” Mr. Naidu said.Unions are virtually irrelevant across much of the labor market. Only 6 percent of workers in the private sector belong to one. The federal minimum wage of $7.25 an hour is so low that it matters little even for many low-wage workers. The Treasury report argues that an uncompetitive labor market is reducing the share of the nation’s income that goes to workers while increasing the slice that accrues to the owners of capital. Moreover, employers facing little competition for workers, it argues, are more likely to offer few benefits and impose dismal working conditions: unpredictable just-in-time schedules, intrusive on-the-job monitoring, poor safety, no breaks.The damage runs deeper, the report says, arguing that uncompetitive labor markets reduce overall employment. Productivity also suffers when workers have a hard time moving to new jobs that could offer a better fit for their skills. Noncompete clauses discourage business formation when they limit entrepreneurs’ ability to find workers for their ventures.Addressing the issues that the report singles out is likely to be an uphill task. The administration’s push to increase the federal minimum wage to $15 has been unsuccessful. In Congress, bills that would ease the path for workers to join a union face long odds. Going after noncompete clauses, no-poaching deals and other forms of anticompetitive behavior would be an easier task.Last year, the Justice Department’s antitrust division brought several cases challenging no-poaching and wage-setting agreements. In January, four managers of home health care agencies in Maine were indicted on federal charges of conspiring to suppress the wages and restrict the job mobility of essential workers during the pandemic.Still, deploying antitrust enforcement in the job market is somewhat new. It has been used mostly to ward off anticompetitive behavior that raises prices for consumers in product and service markets. Persuading courts to, say, prevent a merger because of its impact on wages might be tougher.A note by the law firm White & Case, for instance, complained that the move to block Penguin Random House’s attempt to buy Simon & Schuster on the grounds that it would reduce royalties to authors is “emblematic of the Biden administration’s and the new populist antitrust movement’s push to direct the purpose of antitrust away from consumer welfare price effects and towards other social harms.” More

  • 125 Shares189 Views

    in Economy

    Democrats Renew Push for Industrial Policy Bill Aimed at China

    by

    A major competitiveness bill passed the Senate last year with bipartisan support, only to stall. Democrats hope to revive it in the House, but first they will have to bridge big differences.WASHINGTON — Biden administration officials and Democrats in Congress are pushing to revive stalled legislation that would pour billions of dollars into scientific research and development and shore up domestic manufacturing, amid deep differences on Capitol Hill about the best way to counter China and confront persistent supply chain woes.House Democrats unveiled a 2,900-page bill on Tuesday evening that would authorize $45 billion in grants and loans to support supply chain resilience and American manufacturing, along with providing billions of dollars in new funding for scientific research. Speaker Nancy Pelosi said in a statement that she hoped lawmakers would quickly begin negotiations with the Senate, which passed its own version of the bill last June, to settle on compromise legislation that could be sent to President Biden for his signature.But the effort faces obstacles in Congress, where attempts to sink significant federal resources into scientific research and development to bolster competitiveness with China and combat a shortage of semiconductors have faltered. The Senate-passed measure fizzled last year amid ideological disputes with the House and a focus on efforts to pass Mr. Biden’s infrastructure and social policy bills. For months, the competitiveness measure was rarely even mentioned, except perhaps by Senator Chuck Schumer, Democrat of New York and the majority leader, who has personally championed it.But facing a disruptive semiconductor shortage that has broken down supply chains and helped fuel inflation, Democrats are now vigorously pressing ahead on the bill. With Mr. Biden’s domestic agenda sputtering, the party is eager for a legislative victory, and top administration officials and lawmakers have said they hope to send a compromise bill to the president’s desk in a matter of months.“We have no time to waste in improving American competitiveness, strengthening our lead in global innovation and addressing supply chain challenges, including in the semiconductor industry,” Mr. Schumer said.Both the House bill and the one that passed the Senate last year would send a lifeline to the semiconductor industry during a global chip shortage that has shut auto plants and rippled through the economy. The bills would offer chip companies $52 billion in grants and subsidies with few restrictions.The measures would also pour billions more into scientific research and development pipelines in the United States, create grants and foster agreements between companies and research universities to encourage breakthroughs in new technologies, and establish new manufacturing jobs and apprenticeships.“The proposals laid out by the House and Senate represent the sort of transformational investments in our industrial base and research and development that helped power the United States to lead the global economy in the 20th century,” Mr. Biden said in a statement. “They’ll help bring manufacturing jobs back to the United States, and they’re squarely focused on easing the sort of supply chain bottlenecks like semiconductors that have led to higher prices for the middle class.”The semiconductor shortage has disrupted the economy, broken down supply chains and helped fuel inflation.Sarahbeth Maney/The New York TimesLawmakers will still need to overcome differing views in the House and Senate over how best to take on China and, perhaps more crucially, how to fund the nation’s scientific research.“There are disagreements, legitimate disagreements,” Gina Raimondo, the commerce secretary, said in an interview. “How do we do this? How do we get it right? There doesn’t seem to be much disagreement over the core $52 billion appropriation for chips. There is disagreement around how we make investments in research and development in basic science.”One major difference is that while the Senate bill invests heavily in specific fields of cutting-edge technology, such as artificial intelligence and quantum computing, the House bill places few stipulations on the new round of funding, other than to say that it should go toward fundamental research.In a memo on the legislation, House aides wrote that their measure was “focusing on solutions first, not tech buzzwords.”Some experts argue that approach lacks urgency. Stephen Ezell, the vice president for global innovation policy at the Information Technology and Innovation Foundation, a policy group that receives funding from telecommunications and tech companies, called the House bill “not sufficient to enable the United States to win the advanced technology competition with China.” He argued that the focus on advanced technology in the Senate-passed bill would do more to increase American competitiveness.How the Supply Chain Crisis UnfoldedCard 1 of 9The pandemic sparked the problem. More

  • 150 Shares119 Views

    in Economy

    Cash Aid to Poor Mothers Increases Brain Activity in Babies, Study Finds

    by

    The research could have policy implications as President Biden pushes to revive his proposal to expand the child tax credit.WASHINGTON — A study that provided poor mothers with cash stipends for the first year of their children’s lives appears to have changed the babies’ brain activity in ways associated with stronger cognitive development, a finding with potential implications for safety net policy.The differences were modest — researchers likened them in statistical magnitude to moving to the 75th position in a line of 100 from the 81st — and it remains to be seen if changes in brain patterns will translate to higher skills, as other research offers reason to expect.Still, evidence that a single year of subsidies could alter something as profound as brain functioning highlights the role that money may play in child development and comes as President Biden is pushing for a much larger program of subsidies for families with children.“This is a big scientific finding,” said Martha J. Farah, a neuroscientist at the University of Pennsylvania, who conducted a review of the study for the Proceedings of the National Academies of Sciences, where it was published on Monday. “It’s proof that just giving the families more money, even a modest amount of more money, leads to better brain development.”The payments will continue until the children are at least 4 years old, and the researchers plan further tests.via Lauren Meyer/Baby’s First YearsAnother researcher, Charles A. Nelson III of Harvard, reacted more cautiously, noting the full effect of the payments — $333 a month — would not be clear until the children took cognitive tests. While the brain patterns documented in the study are often associated with higher cognitive skills, he said, that is not always the case.“It’s potentially a groundbreaking study,” said Dr. Nelson, who served as a consultant to the study. “If I was a policymaker, I’d pay attention to this, but it would be premature of me to pass a bill that gives every family $300 a month.”A temporary federal program of near-universal children’s subsidies — up to $300 a month per child through an expanded child tax credit — expired this month after Mr. Biden failed to unite Democrats behind a large social policy bill that would have extended it. Most Republicans oppose the monthly grants, citing the cost and warning that unconditional aid, which they describe as welfare, discourages parents from working.Sharing some of those concerns, Senator Joe Manchin III, Democrat of West Virginia, effectively blocked the Biden plan, though he has suggested that he might support payments limited to families of modest means and those with jobs. The payments in the research project, called Baby’s First Years, were provided regardless of whether the parents worked.Evidence abounds that poor children on average start school with weaker cognitive skills, and neuroscientists have shown that the differences extend to brain structure and function. But it has not been clear if those differences come directly from the shortage of money or from related factors like parental education or neighborhood influences.The study released on Monday offers evidence that poverty itself holds children back from their earliest moments.“This is the first study to show that money, in and of itself, has a causal impact on brain development,” said Dr. Kimberly G. Noble, a physician and neuroscientist at Teachers College, Columbia University, who helped lead the study.Dr. Noble and colleagues from six universities recruited a thousand mother-infant pairs within days of the babies’ birth and randomly divided the families into two groups. One group received a nominal $20 a month and another received $333.Using electroencephalograms, or EEG tests, to evaluate the children at age 1, the researchers found that those in the high-cash group had more of the fast brain activity other research has linked to cognitive development than those in the low-cash group. The differences were statistically significant by most, but not all, measures and were greatest in parts of the brain most associated with cognitive advancement.The payments will continue until the children are at least 4 years old, and the researchers plan further tests.Researchers are still trying to determine why the money altered brain development. It could have purchased better food or health care; reduced damaging levels of parental stress; or allowed mothers to work less and spend more time with their infants.The question of whether cash aid helps or hurts children is central to social policy. Progressives argue that poor children need an income floor, citing research that shows even brief periods of childhood poverty can lead to lower adult earnings and worse health. Conservatives say unconditional payments erode work and marriage, increasing poverty in the long run.President Bill Clinton changed the Democratic Party’s stance a quarter-century ago by abolishing welfare guarantees and shifting aid toward parents who work. Though child poverty subsequently fell to record lows, the reasons are in dispute, and rising inequality and volatility have revived Democratic support for subsidies.There are a variety of public and private programs underway in the United States to measure the effects of a guaranteed income on poor families, and many other rich countries offer broad children’s allowances without condition.The temporary expansion of the child tax credit, passed last year, offered subsidies to all but the richest parents at a one-year cost of more than $100 billion. Representative Suzan DelBene, Democrat of Washington, said the study strengthened the case for the aid by showing that “investing in our children has incredible long-term benefits.”Greg J. Duncan, an economist at the University of California, Irvine, who was one of nine co-authors of the study, said he hoped the research would refocus the debate, which he said was “almost always about the risks that parents might work less or use the money frivolously” toward the question of “whether the payments are good for kids.”But a conservative welfare critic, Robert Rector of the Heritage Foundation, argued that the study vindicated stringent welfare laws, which he credited with reducing child poverty by incentivizing parents to find and keep jobs.“If you actually believe that child poverty has these negative effects, then you should not be trying to restore unconditional cash aid,” he said. “You certainly don’t want to go in the business of reversing welfare reform.”Economists and psychologists once dominated studies of poor children, but neuroscientists have increasingly weighed in. Over the past 15 years, they have shown that poor children on average differ from others in brain structure and function, with the disparities greatest for the poorest children.EEG tests have found differences in electrical activity. Magnetic resonance imaging, or M.R.I.s, have shown differences in the size of the cerebral cortex, especially in areas linked to language development and executive functioning. One study found differences in cerebral cortex size may account for up to 44 percent of the achievement gap between high- and low-income adolescents.As with any group differences, averages do not predict individual outcomes. Many other factors beyond brain features influence cognitive development, and many low-income children thrive.To test the effects of cash aid, Baby’s First Years raised more than $20 million from public and private sources, including the National Institutes of Health. Researchers recruited participants from maternity wards in New York City, Minneapolis-St. Paul and the metro areas of New Orleans and Omaha, randomly assigning them to the high- and low-payment groups.The families had average incomes of about $20,000, below the official poverty line for an average-sized family, meaning those who received $333 a month experienced an income gain of approximately 20 percent. The mothers were told they could use the money as they wished.The researchers predicted that children in the high-cash group would show more high-frequency brain activity than those in the low-cash group and less low-frequency activity. Previous research has found such patterns are associated with higher cognitive skills and fewer attention problems.The results largely conformed to predictions, with the children who received the higher grants showing more of the fast brain activity (though no differences in slow brain activity).The scientists wrote that the money “appeared” to cause the changed brain patterns, though they were less equivocal in interviews. Dr. Noble said the evidence, though strong, was not “airtight,” in part because the coronavirus pandemic allowed them to test only 435 infants.Researchers are still trying to determine why the money altered brain development. It could have purchased better food or health care.Cody O’Loughlin for The New York TimesJohn Gabrieli, a neuroscientist at the Massachusetts Institute of Technology, said the evidence that cash aid altered brain activity was persuasive and “very important scientifically,” though he added, “We want to see if these differences result in improvements to cognition.”While the size of the recorded differences are modest (about a fifth of a standard deviation), the researchers said they were comparable to those produced by the average school experiment, like giving children tutors. While those services are often hard to administer, they added, cash can be distributed on a mass scale.Katherine Magnuson, a co-author of the study who directs the Institute for Research on Poverty at the University of Wisconsin, said she was surprised that only a year’s worth of aid made a difference. “It shows how sensitive the brain is to environments,” she said.Critics of unrestricted cash aid often warn that families will waste or abuse it. But Lisa A. Gennetian, an economist at Duke University and a co-author of the study, said the results indicated that parents could be trusted to make good decisions. “For one family, that might be food; for another, it might be housing,” she said. Additional research will examine how parents spent the money.Unlike last year’s expansion of the child tax credit, the experimental payments were narrowly targeted to poor newborns, which would make it less costly to replicate and possibly ease conservatives’ concerns about deterring work.One critic of the broader payments, Angela Rachidi of the American Enterprise Institute, said the study suggested the importance of infant bonding. Should the initial results hold up, she said, they could lend support for policies that help mothers spend more time with their newborns, including paid leave.But any cash aid, she said, should be “targeted to those with low incomes, time limited, and not erode work incentives in the long term.” More