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.
Yes, these pieces of legislation are huge and will continue to have a positive impact for years to come. But I'm guessing that most (or at least many) voters don't know the legislation exists and if they do, haven't read the details or thought much about the impact...only the money spent. He and his surrogates must get out there and tout the good news non-stop...
When you have an extra minute...I and my readers would love to better understand how your work for the U.S. Census demonstrates that these pieces of legislation are having a positive impact.
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.
An addendum: It will be interesting to see how Biden’s industrial policy efforts will play out geopolitically. I can’t predict exactly how it will affect relations with China, as future administrations will be swing between more and less bellicose in their treatment of China. I do know that India and South Korea are more dismayed at the IRA’s electric vehicle provisions. Japan, interestingly, adapted to the IRA where the latter concerns minerals sourcing for EVs. The EU is crafting its own tax credit package in response to the IRA. At best, the Act could spur friendly competition and promote new, union-inspired clean tech trade rules among countries. Each Global South country developing its own independent industrial policy to cut poverty and improve self-reliance would be a refreshing break from the current trade order--after all, the U.S. did it early in its history.
I learned in readings for this post that most of the minerals needed to produce EV batteries are sourced outside of the U.S., which adds to the complications.
All interesting comments, Jarrod. Thanks! And I'll check out the articles you recommended in point 2. I agree that the IP and the four pieces of legislation have some flaws, but that is the product of compromise , I suppose. On the other hand...it bothers me than businesses constantly are subsidized in one way or another, when they can well-afford to invest themselves. But when it comes to giving some money directly to people, the government hand shakes— a basic income sure would help a lot pf people!
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.
Yes, these pieces of legislation are huge and will continue to have a positive impact for years to come. But I'm guessing that most (or at least many) voters don't know the legislation exists and if they do, haven't read the details or thought much about the impact...only the money spent. He and his surrogates must get out there and tout the good news non-stop...
When you have an extra minute...I and my readers would love to better understand how your work for the U.S. Census demonstrates that these pieces of legislation are having a positive impact.
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.
An addendum: It will be interesting to see how Biden’s industrial policy efforts will play out geopolitically. I can’t predict exactly how it will affect relations with China, as future administrations will be swing between more and less bellicose in their treatment of China. I do know that India and South Korea are more dismayed at the IRA’s electric vehicle provisions. Japan, interestingly, adapted to the IRA where the latter concerns minerals sourcing for EVs. The EU is crafting its own tax credit package in response to the IRA. At best, the Act could spur friendly competition and promote new, union-inspired clean tech trade rules among countries. Each Global South country developing its own independent industrial policy to cut poverty and improve self-reliance would be a refreshing break from the current trade order--after all, the U.S. did it early in its history.
I learned in readings for this post that most of the minerals needed to produce EV batteries are sourced outside of the U.S., which adds to the complications.
All interesting comments, Jarrod. Thanks! And I'll check out the articles you recommended in point 2. I agree that the IP and the four pieces of legislation have some flaws, but that is the product of compromise , I suppose. On the other hand...it bothers me than businesses constantly are subsidized in one way or another, when they can well-afford to invest themselves. But when it comes to giving some money directly to people, the government hand shakes— a basic income sure would help a lot pf people!
You’re welcome! I agree with everything you’ve written. Hopefully I’ve given you enough food for thought