Those who hold the superstition that an Ayn Rand “free market” is the cure to all ills — despite its disastrous results in 2008, etc. — meet every constructive idea to get the American economy out of the ditch with: “That’s industrial policy!” Industrial policy, you see, is always some failed commie central planning nightmare from the Soviet Union and eastern Europe circa 1980. And that’s been swept into the dust-bin of history.
In fact, America does have an industrial policy, one constructed by years of often convoluted, often ineffective measures produced by Congress and presidents, pushed by the army of lobbyists for the connected huge corporate interests.
American industrial policy includes big tax cuts for the wealthiest and legal tax dodges for big corporations; special treatment for a few big exporters such as Boeing and Caterpillar; huge agricultural subsidies; encouragement to offshore jobs; the Military-Industrial Complex (Iraq will buy F-16s from Uncle Sam); taxpayer backing for deregulated Wall Street and the TBTF banks no matter what they do; union-busting NLRBs; heavy subsidies for house building, especially sprawl, and house ownership; more subsidies for the fossil fuels industries; decades of federal support for airlines and freeways, but not trains and transit; a for-profit health system supported by Washington; incentives for job-killing mergers; failure to protect small competitors with antitrust enforcement against consolidation. I could go on. But none of this comes from the benign magic of the “free market.”
The problem is that this industrial policy isn’t working. More than 14 million are “officially” unemployed. Tens of thousands of factories have closed. Low taxes are not creating jobs, at least in America. The trade deals of the past 20 years are producing more losers than winners. Wages are stagnant while job quality has eroded. Economic mobility is less. The financial playerz are kids playing with matches in an explosives warehouse. The commons and social compact that made America a beacon to the world are being shredded. Concentration has lessened competition. Endless wars have wasted trillions that could have gone to productive investments in education and infrastructure. We’re in denial about how to deal with China as competitor. Our fossil fuels dependency is greater than ever.
The minority of winners who have worked so hard to ensure this industrial policy might say, “mission accomplished.” But no one should be under the illusion that such a policy doesn’t exist.
Today’s Econ Haiku:
McBoeing chose cheap
Instead of Puget value
The result: Delay