Congratulations for the article. I have a question from someone who sees the situation from outside the United States. We can see differences between the policies of Biden and Trump, but don't you think that Biden continued with the protectionist ideal established by Trump?
In my opinion, this was not being discussed before Trump. What's more, the Obama administration was working to establish the TPP.
And one more question. How do you think international politics should react to this new industrial policy? The last 40 years, the US spent teaching the world the importance of absolute free trade, Bush came to Argentina to ask for the FTAA (Free Trade Area of the Americas) (FTAA).
The legislation passed by Biden is huge, having such a positive effect on our economy that it cannot be overstated. Every day working for the US Census, I see this. What’s frustrating however is that so many of the the people who have jobs bc of his legislation don’t realize this and actually believe they were better off under the last administration. This administration is much better at messaging than past Democratic administrations but we still have a long way to go if we’re going to fight back the lies and doubts that T and the Republicans have been sowing for too long.
This was a quite great overview of industrial policy. I have a few thoughts in response to the bottom question:
1. I’ve always thought that job creation should be a key priority in government for the reasons listed above. Also, as fiscal hawks will note, creating jobs means less reliance on welfare rolls. President Carter recognized this in his attempt at welfare reform policy, while Clinton didn’t. As much as I’d rather TANF and the like not have been implemented in the first place, industrial policy can serve as a complement to welfare reform, and that the Clinton administration didn’t consider Reich’s ideas more is one of the great blunders of modern history.
2. An aside: Claudia Sahm wrote an article two years ago about the importance of the ARP to today’s economy and its growth, from $1400 checks to UI top-ups to Child Tax Credit changes to state and local government job preservation. She contrasts it with the approach that Larry Summers proposed in 2009--limiting industrial policy to below $1 trillion, and limiting UI increases to $25 per week. Jack Meserve also wrote in 2017 about the lack of stimulus checks at the time, though he used it to attack such things as the arcane payroll tax design influenced by Cass Sunstein’s ‘nudge’ theory. Sahm also wrote an article to that effect in 2012. I recommend googling and reading them.
3. The industrial policies are still quite flawed, in my opinion. As examples, per Transportation for America, the IIJA doesn’t spend enough money on reducing car dependency, whereas an earlier version would’ve made transportation departments plan for that. Per The American Prospect, the CaSA doesn’t prevent firms from using grant money to replace existing R&D money that they’d funnel into stock buybacks, or building factories without installing the equipment (thus keeping chip prices high) or using non-union workers (thus preventing high-quality and on-time construction), much less helps with antitrust. In my view, the IRA relies too much on tax credits rather than direct spending to carry out its major climate action, which obscures the role of government (cf. the book “The Submerged State”). That’s not to say the three are failures, just that there’s a lot to like and a lot to dislike vis-a-vis effects on economic inequality.
4. That said, there are bold options that can serve to build on these four acts while attacking our economy’s structural issues. California just opted to study European-style mixed-income public housing, attacking the housing crisis at its root. Germany held down monthly rail pass prices at $54 last year after trying even cheaper rail passes the year before, and Quebec opened its driverless metro system too, attacking car dependency. Many countries have some form of monthly universal child allowance rather than the Child Tax Credit (which has to be filed for every year), attacking child poverty more simply. Brazil, Cuba, Sweden, Thailand and South Africa have publicly-owned pharma firms, attacking drug costs. Industrial policy can tie all of these ideas together.
Congratulations for the article. I have a question from someone who sees the situation from outside the United States. We can see differences between the policies of Biden and Trump, but don't you think that Biden continued with the protectionist ideal established by Trump?
In my opinion, this was not being discussed before Trump. What's more, the Obama administration was working to establish the TPP.
And one more question. How do you think international politics should react to this new industrial policy? The last 40 years, the US spent teaching the world the importance of absolute free trade, Bush came to Argentina to ask for the FTAA (Free Trade Area of the Americas) (FTAA).
The legislation passed by Biden is huge, having such a positive effect on our economy that it cannot be overstated. Every day working for the US Census, I see this. What’s frustrating however is that so many of the the people who have jobs bc of his legislation don’t realize this and actually believe they were better off under the last administration. This administration is much better at messaging than past Democratic administrations but we still have a long way to go if we’re going to fight back the lies and doubts that T and the Republicans have been sowing for too long.
This was a quite great overview of industrial policy. I have a few thoughts in response to the bottom question:
1. I’ve always thought that job creation should be a key priority in government for the reasons listed above. Also, as fiscal hawks will note, creating jobs means less reliance on welfare rolls. President Carter recognized this in his attempt at welfare reform policy, while Clinton didn’t. As much as I’d rather TANF and the like not have been implemented in the first place, industrial policy can serve as a complement to welfare reform, and that the Clinton administration didn’t consider Reich’s ideas more is one of the great blunders of modern history.
2. An aside: Claudia Sahm wrote an article two years ago about the importance of the ARP to today’s economy and its growth, from $1400 checks to UI top-ups to Child Tax Credit changes to state and local government job preservation. She contrasts it with the approach that Larry Summers proposed in 2009--limiting industrial policy to below $1 trillion, and limiting UI increases to $25 per week. Jack Meserve also wrote in 2017 about the lack of stimulus checks at the time, though he used it to attack such things as the arcane payroll tax design influenced by Cass Sunstein’s ‘nudge’ theory. Sahm also wrote an article to that effect in 2012. I recommend googling and reading them.
3. The industrial policies are still quite flawed, in my opinion. As examples, per Transportation for America, the IIJA doesn’t spend enough money on reducing car dependency, whereas an earlier version would’ve made transportation departments plan for that. Per The American Prospect, the CaSA doesn’t prevent firms from using grant money to replace existing R&D money that they’d funnel into stock buybacks, or building factories without installing the equipment (thus keeping chip prices high) or using non-union workers (thus preventing high-quality and on-time construction), much less helps with antitrust. In my view, the IRA relies too much on tax credits rather than direct spending to carry out its major climate action, which obscures the role of government (cf. the book “The Submerged State”). That’s not to say the three are failures, just that there’s a lot to like and a lot to dislike vis-a-vis effects on economic inequality.
4. That said, there are bold options that can serve to build on these four acts while attacking our economy’s structural issues. California just opted to study European-style mixed-income public housing, attacking the housing crisis at its root. Germany held down monthly rail pass prices at $54 last year after trying even cheaper rail passes the year before, and Quebec opened its driverless metro system too, attacking car dependency. Many countries have some form of monthly universal child allowance rather than the Child Tax Credit (which has to be filed for every year), attacking child poverty more simply. Brazil, Cuba, Sweden, Thailand and South Africa have publicly-owned pharma firms, attacking drug costs. Industrial policy can tie all of these ideas together.