Intel chief: Obama (still) driving US off cliff
Plus ça change, plus c'est la même chose
Intel CEO Paul Otellini believes that the US is heading towards a second-rate status as a technology leader, and it's the Obama administration's fault.
"The next big thing will not be invented here. Jobs will not be created here," unless government policies are changed, Otellini told a Tuesday gathering at the Technology Policy Institute Aspen Forum's annual conference, which had the less-than-cheery theme of "Innovation and Critical Policy Choices: Is the United States Losing its Edge?"
It was déjà vu all over again. Otellini's remarks were a reprise of his nearly identical comments at a roundtable discussion held in the same venue last year.
As reported by Cnet, Otellini said Tuesday of the Democrat-led government: "I think this group does not understand what it takes to create jobs. And I think they're flummoxed by their experiment in Keynesian economics not working."
Last year, he said: "I am not a Keyensian. I don't necessarily think that all this spending by the government is what will save the economy. My opinion. I do think that it was essential to do some significant short-term spending to put confidence back into the system. Notice I said confidence, not money."
This year he said that "every business in America has a list of more variables than I've ever seen in my career," referring to capital gains taxes and the R&D tax credit.
Last year, he complained that "The thing that is most difficult as a businessperson when looking at large investments ... is 'what are the variables?' And there's just so many variables today on every front." He defined variables at that time as "cost of energy, cost of health care, tax rates, R&D credits, you name it."
This year, he said: "I can tell you definitively that it costs $1 billion more per factory for me to build, equip, and operate a semiconductor manufacturing facility in the United States."
Last year: "A new semiconductor factory at world scale built anywhere in the world, starting from scratch, is about four and a half billion dollars. That is in the United States. If I built that factory in almost any other country in the world, where they have significant incentive programs, I could save a billion dollars."
Cnet notes that Otellini claimed in this year's remarks that labor costs weren't a major factor in deciding where to site a factory, but rather taxes and government regulations. Last year, he told the Aspen group that the $1bn discount realized in Intel's new China factory "wasn't because the labor costs are lower, it was because the construction costs were a little bit lower, but the cost of operating, when you look at it after tax, was substantially lower."
Otellini told this year's audience that he was concerned that decisions being made — or, for that matter, not made — by Congress could make companies "not invest in the United States. They'll invest elsewhere." Last year, he said: "The things that are not conducive to investments here, in our industry, are tax and capital-equipment credits."
This year: "If our tax rate approached that of the rest of the world, corporations would have an incentive to invest here." Last year: "We're becoming less competitive on the global stage because of the rate differential today, both R&D tax credit and corporate taxes," adding: "My semiconducter competitors in Korea actually have zero cost of money, and have de minimus taxes."
Otellini's audience this year heard him say that current government policies are likely to cause "an inevitable erosion and shift of wealth, much like we're seeing today in Europe — this is the bitter truth." Last year his dramatic approaching-calamity statement was: "I'm a little worried that when we wake up to this crisis, we'll be in the abyss."
He also told his audience this year that the US lead in technology training and research has dissipated. "We [once] seemed a generation ahead of the rest of the world in information technology. That simply is no longer the case," an echo of last year's comment that "I don't see us in a mode to even catch up to where we used to be with American citizens. The American graduate schools are still the best in the world, but half the seats are filled by non-US citizens."
One notable difference in Otellini's remarks at this year's event was that they included no kind words aimed at the Obama administration. Last year, when the moderator of the dinnertime convocation asked him "How is this administration's relationship to business?" the Intel CEO fiddled with his iced tea for a moment, then responded: "Cordial."
When prodded for more detail, he added: "They're listening to what are the problems. They reach out pretty aggressively, and say 'What are your issues? How are you doing? What is your business doing?' And we give them answers."
In the intervening year, his attitude had hardened. "They're in a 'Do' loop right now trying to figure out what the answer is," he grumbled.
It appears that Otellini's opinion of the Obama administration is tracking right along with America's as a whole. Last year at this time, Obama held a 51 per cent to 42 per cent lead in Gallup's ongoing presidential job-approval poll. As of Gallup's most recent poll, those number are exactly reversed. ®