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Political Economy Impacts Future of U.S. Semi Industry

This has been originally published on EBN

The presidential elections in the U.S. are in full swing and many businesses and business owners are concerned with how the political atmosphere will be shaped through 2016. As businesses must comply with federal laws, economic analysis remains incomplete without political analysis. It’s critical to keep in mind that the elected officials are the ones who pass laws that may adversely affect or favor the electronics industry—so OEMs, contract manufacturers and others involved in the industry need to pay attention to the political economy.

It’s clear that politics already influence business. Consider the enormous amounts business leaders spend on political campaigns to gain the attention of a particular candidate. As a macroeconomist who has authored two volumes on global semiconductor industry, I believe in free markets that lower government intervention in the economy and lower income taxes on consumers in order to drive an economic demand.

I was recently invited to discuss my solution to the American economy’s enslavement to debt on a talk radio show. You can listen to that segment of the Wealth Money Radio Show by clicking below:

U.S. macroeconomic policies have resulted in an ongoing economic depression in the country’s economy. I have presented solutions on evolving out of the ongoing economic stagnation in my first book Mass Capitalism: A Blueprint for Economic Revival. Recently, I also interviewed economist and author Professor Ravi Batra, on DP TV in Dallas, TX. Batra had forecasted a coming economic revolution in the United States and had plenty to say. View the interview titled ‘Career Politicians and Fury in America’ by clicking on the image below:

Batra made some key points about mass capitalism, saying that:

1. It would help eliminate unemployment in U.S. economy.
2. It would restore free markets.
3. It would eliminate the need for government bureaucracy.
4. It would lower taxes for everybody.

I believe that a pro-business government also has to be a pro-consumer to succeed. When consumer wages grow, consumers invests that money into buying essential goods. However, the government policies since 1980s have resulted in lower wages for consumers although the economic productivity overall has steadily increased.  Batra believes that this growing wage/productivity gap is the root cause of the highest poverty in the American economy and can be traced to political corruption and monopoly capitalism. It follows that the wage/productivity gap needs to be closed in order to revive the economy.

In a foreword for my second book, Sustaining Moore’s Law: Uncertainty Leading to a Certainty of IoT Revolution, Batra pointed to my explanation of how we can close this gap and sustain the progress of Moore’s law for the electronics industry. When Batra spoke on Wealth Money radio show, he had some interesting ideas on how to eliminate both consumer and national debt. He believes that any debt is good and can raise the standard of living, oas long as that debt can be repaid in a timely manner. In speaking about the upcoming election, he offered some bright ideas on how the presidential candidates could work to restore prosperity back to the U.S. by creating competitive capitalism or free markets. Listen here:

 

A debt based economic system not only leads to poverty if wages do not rise as fast as productivity but it also leads to a system of servitude. In my third volume to be released this year and titled More than Moore and Beyond Moore: Roadmap for Progress of the Semiconductor Industry, I provide clear evidence of correlation between the growth of transistors on an integrated circuit (IC) with the continued progress of Moore’s Law and the rise in country’s national debt. Elected politicians have violated the national debt limit several times, so that it now has reached a figure greater than 19 trillion USD.

If debt limit is not allowed to rise, the progress of Moore’s law will slow due to macroeconomics. However, the U.S. cannot continue to let its national debt rise forever. Therefore, it makes sense to cut the national debt and to sustain the progress of the U.S. semiconductor industry through free market economic reforms.

Demand-side economic drivers, of course, can help the U.S. envision programs that advance beyond Moore’s law. Additionally, we might envision a virtual IDM fab that complies with macroeconomic policies. Over time, we can forge a path forward for revival of semiconductor industry, usher in the Internet of Things revolution as well as drive the progress of Moore’s law as per the new drivers proposed by the International Technology Roadmap for Semiconductors (ITRS). You can listen to my most recent forecasts here:

An understanding of political economy along with a solid background in the semiconductor industry have enabled me to put forth some novel ideas for the revival and the bright future of our industry. I hope the decision makers of our industry pay heed before it is too late for our economy. The upcoming presidential elections and the resulting macroeconomic policies are going to be critical in deciding the fate of the U.S. economy and its semiconductor industry given the failure of Reaganomics, Clintonomics, Bushisms and Obamanomics. America needs a different approach to restore a free market economy.  Of course,  every American can be part of that solution by casting their vote with due diligence.

We need to keep this conversation going. Let us know what you think of the presidential election and its impact on the U.S. electronics industry in the comments section below.

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