Rep. French Hill, a Republican from Arkansas and vice chairman of the House Financial Services Committee, recently criticized the Biden-Harris administration for what he perceives as the failure of its domestic industrial policy, particularly regarding high-tech manufacturing initiatives like the CHIPS Act. This legislation aimed to revitalize semiconductor manufacturing within the United States by allocating $39 billion in grants. Despite the hefty financial investment, Hill and other observers argue that these efforts have not yielded the expected results, largely attributing the shortcomings to the imposition of diversity, equity, and inclusion (DEI) policies that accompany such funding. Industry leaders, including Matt Cole and Chris Nicholson, have voiced frustrations that these requirements have hindered companies’ ability to adapt and thrive in the semiconductor landscape.
Prominent chip manufacturers such as Intel, Taiwan Semiconductor Manufacturing Company (TSMC), and Samsung have recently announced significant delays or halts in their U.S. production plans, raising questions about the long-term viability of the CHIPS Act. These developments are particularly concerning given the substantial public funding intended to stimulate domestic manufacturing. Rep. Hill sees these setbacks as indicative of broader flaws in what he terms a “European-style industrial policy.” He advocates for a more competitive, supply-side approach aimed at enhancing the U.S.’s manufacturing capabilities without the regulatory burdens associated with the current administration’s policies.
In this context, Hill argues for the implementation of policies that would encourage beneficial lending practices, particularly in sectors such as oil and gas exploration, as well as high-tech manufacturing. John Carney, an economics editor at Breitbart News, elaborated on this idea, suggesting that adjusting capital requirements for loans could foster investment without the pitfalls of direct subsidies. By ensuring that companies remain financially accountable, the focus would shift back to free-market principles that prioritize risk-taking and innovation, rather than reliance on taxpayer funding that results in inefficiency and waste.
Rep. Hill also proposes expanding the role of major financial institutions like the World Bank and the Export-Import Bank to further boost manufacturing exports and investment. He identifies the need for comprehensive regulatory, tax, and permitting reforms to facilitate growth in capital-intensive sectors. By streamlining these processes and reducing the regulatory burden on the manufacturing sector, Hill believes that American manufacturing, particularly in high-tech and nuclear energy, can regain its competitive edge in the global marketplace.
Central to Hill’s argument is the notion that the war on energy lending, exemplified by SEC Chairman Gary Gensler’s proposed climate-related disclosure rules, has been detrimental to manufacturing. He asserts that these regulations may discourage financial institutions from investing in key energy projects, thereby stifling innovation and growth within the sector. Hill’s perspective paints a picture of a more favorable regulatory environment that can unleash the potential of American manufacturing, enabling it to compete effectively on a global stage without the constraints that have characterized the Biden administration’s approach.
In summary, Rep. Hill advocates for a paradigm shift in U.S. industrial policy that moves away from the current administration’s emphasis on subsidies and DEI mandates. Instead, he suggests fostering an environment of reduced regulation and supportive lending practices that can stimulate American manufacturing growth. The contrasting policies of the past administration, which relied heavily on government intervention and funding, have been met with skepticism by industry leaders who are now seeking more market-driven solutions that leverage the principles of capitalism while encouraging innovation and competitiveness in vital sectors.
