Intel CEO: Things Need to Change in the U.S.

Monday night Intel CEO Paul Otellini warned government officials that the U.S. will face a huge tech decline if government policies are not altered. In fact, the "next big thing" won't be invented here in the States, and jobs will be created outside our borders.

The warning was part of his observations about the Obama administration and the nation's economy during dinner at the Technology Policy Institute's Aspen Forum. He took aim at the U.S. legal environment, claiming that its become so hostile to business that there could be "an inevitable erosion and shift of wealth, much like we're seeing today in Europe--this is the bitter truth."

He went on to criticize the administration's Keynesian policy of economic stimulus and its inability to understand the concept of creating new jobs. "They're in a 'Do' loop right now trying to figure out what the answer is," Otellini told the audience.

"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," Otellini said. He also added that the majority of his costs were taxes and regulations not imposed in other countries. If the rates matched those with the rest of the world, outside corporations would have more of an incentive to invest in the U.S.

Former HP CEO and current Republican Senate candidate Carly Fiorina pointed out just a day prior that corporate tax rates are the second highest in the world. Fiorina also said that government policies are pushing jobs overseas rather than making U.S. companies more competitive against international rivals.

Bottom line, if politicians don't cut business taxes, people will not invest in the United States. "They'll invest elsewhere," Otellini said.

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  • hellwig
    I normally don't like Intel's business practices, but he makes a good point (read the CNET article for more elaboration). He's not talking about the pressure from the FTC or anything like that. He's talking about the ridiculous taxes and laws that various governments (federal, state, local, etc..) setup that hinder business rather than promote it.

    Remember that Simpson's episode where they were going to film the Radioactive Man movie? The town drove away the movie producers because they started taxing EVERYTHING. Well, that might have been fiction, but lots of communities behave that way. Microsoft would be located in Albuquerque today if it weren't for stupid tax laws in place when Bill Gates used to live there.

    Some small county sees a big corporation and doesn't think "wow, thanks for all those jobs you provide, pumping in money to people's pockets which then gets spent at other shops, benefitting all of us". No, they think "how can we get more of those millions to fund important projects like gold-plated toilets in City Hall and putting up new fancy lights on Main Street to replace those old, drab, yet fully functional lights we already have?"

    My uncle incorporated his business a few years ago. His single largest expense (more that wages, resources, anything) was hiring a business lawyer to make sure he complied with all the ridiculous laws (and he incorporated in Delaware, which was supposed to make it easier).

    The days of forming a company in your mother's garage are done for. Heck, if you try to sell anything out of her garage, the local police would probably bust your ass for zoning violations. That's the main reason you hardly see lemonade stands anymore, them kids ain't got the right permits.
    35
  • ohseus
    @2real
    Learn to read. He wants the U.S. economy to be strong. That requires businesses being able to cost effectively do business. Stock holders want a business to do well for stock values and dividends. Keep in mind stick holders are people trying to save for retirement, 401k plans and many retirement funds.

    So if building a plant in the U.S. is more cost effective they will and that makes jobs. Not rich getting richer, everyone being better off.
    35
  • azcoyote
    Actually Otellini is 100% right.

    The claim of corporate greed is tired at best...

    Businesses run where they can make money. As a publicly owned company (Intel) it is THEIR JOB to turn a profit. Expecting them to stay in the US from loyalty is not reasonable in a global world economy. It would be nice, but not reasonable.

    So he is spot on....
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  • Other Comments
  • 2real
    so a greedy corporation wants more money... go figure
    all he wants to do is push the tax burden on the common man... the rich get richer and the poor get poor
    -25
  • partytime
    Thanks again Obama for F***ing over he country.. I wish I was Canadian...
    -11
  • griffed88
    2real nailed it on the head
    -21