Progressive approaches need to fail before they can change.
“When Klein raises these concerns with Commerce Secretary Gina Raimondo, she is astonishingly dismissive, issuing generalities such as ‘I consider it a fact that a more diverse work force is a more productive work force’....”
Ezra Klein’s response to Raimondo’s “fact”?
“I don’t disagree with her,” he immediately writes. These are literally the first words that follow her remarkable quote.
Raimondo is, indeed, “astonishingly dismissive.” And Klein, in turn, is astonishingly loyal to the party-line. Before he can argue that these conditions, admirable as he finds them, may not be ideal, he first is sure to demonstrate fealty to the “fact”. If it appeals to our ideals it’s a fact.
DEI in all of its manifestations is anti-meritocracy and reduces America's competitiveness against
China. Noah, you don't need to "redpill" to embrace at least a qualified, more nuanced version of this position, even if it is controversial/verboten on much of the left.
I think you're being overly optimistic by suggesting "well, we need to learn what works and what doesn't, but we can fix it later"
We already know what works and what doesn't! The problem is the politicians aren't willing to prioritize and make tradeoffs.
To take another example, CA HSR has been going on for nigh on 20 years now. Have they failed to produce a high-quality, reasonable cost rail system because of lack of feedback? No, they've failed because they haven't implemented best practices, their needs haven't been streamlined, and governments and project management have refused to make the tradeoffs need to implement the best practices.
There was a time when a huge swath of government subcontractors didn't exist because the government just employed diverse people directly. Historically, this was a ticket to the middle class for many immigrants and others would not otherwise have had that opportunity. I would argue that a lot of the inefficiencies of government come from this idea that outsourcing government (thanks, Al Gore) is automatically better. The largest group of employees in the country are government employees. The second largest group of employees in the USA are government contractors, who do much of the key work of our government without the salaries and benefits of actually being government workers.
Also worth noting: these "everything bagel" requirements are not strange new asks for private companies. These are ordinary, routine requirements for doing business with the US government. I don't see anyone complaining about the military industrial complex having to jump through these same hoops. In fact, there are already systems in place for handling these things, with knowledgeable folks wrangling the requirements. Maybe a fab maker should hire some, instead of trying to slide by being subjected to the same rules as every other company.
I think the big obstacles to a steady approach at the federal level are Congressional dysfunction and the nature of the Democratic coalition. If you have to stuff everything into one big omnibus bill that meets some arcane Senate rules, everyone in the coalition wants their bite since another one isn't coming.
Of course, there are plenty of solid blue states that do dumb everything bagel politics and stumble over their own bureaucracies. There's no excuse for that kind of paralysis.
"We should expect to see this pattern repeated again and again. Industrial policy will hit challenges and stumbling blocks, and each of these will instantly be trumpeted by both ideological libertarians and opponents of progressive social policy as a reason to scrap the entire idea of using the government to promote investment. I also expect this premature doomerism to prompt some progressives themselves to rally around the existing approach and insist no changes at all need to be made."
Insofar as the quoted segment concerns libertarianism, this is not doomerism. The libertarian position on this subject, which I share, is that government should neither subsidize nor inhibit. This is reflective of a deep and abiding OPTIMISM regarding the human condition in general and the United States of America and its people in particular.
Libertarianism is an attractive ideology (to me, anyway) because it takes as a core tenet the imperfectability of humans. In reality, we have the evidence of thousands of years of failed attempts to perfect humanity, and the millions or billions of corpses, and at least the same numbers of slaves, or near enough thereto, that have been the result of these attempts. Still, most of our modern ideologies and philosophies take for granted that humans can, indeed, be made perfect through just the right policy or just the right pull of a lever or just the right means of worship, etc. etc. ad infinitum. At best, this is deeply ignorant. At worst it is evil. Most of the time it's just plain bad.
The continual attractiveness of this belief is dismaying, but not that mysterious. It is a fact that humans, in general, are illiberal and believe in imposing their beliefs on their neighbors in general and dissidents in particular (from a "well-intentioned" desire to perfect them, of course). This popularity does not make illiberalism correct. In fact, it makes it incorrect.
In this context, we are expected to believe that the same government that created the stasis subsidies will not only roll them back but replace them with better policies (after a period of trial and error no less!!) that will not merely remove the impediments but correct the problems the impediments have caused? I think fucking not.
I think pure rollback is the best we can expect and the most we should want. Experimentation in the other direction, however well-intentioned, is just another experiment in perfectibility. We know how they end, how they always end. We'll end up with just as many terrible ossified policies (perhaps especially if it's done by trial-and-error, as Noah advocates here). There's nothing more permanent than a temporary (or, god forbid, an emergency) government program.
Humans will never be perfect, so simply make them secure in their essential rights (life, liberty, property) and allow them to interact with each other as equals. Neither subsidize nor impede (government contracting is mostly fine at bottom). Make pluralism the only option (I don't care if you have to erode democracy a bit to do this! the voters want concentration camps!). Government was never and will never be trustworthy. You can never trust it to make good decisions, let alone to respect your rights. Government did the most damage to your rights and enacted the worst stasis subsidies when trust in government was highest. As Chris Hayes (lol) said: "leave people alone and mind your own goddamn business."
Preach, Brother Noah!
A well-researched and well-written article, and I have only one minor quibble with it. Politicians are notoriously short-sighted. Usually, they can't see past the next election, and the public is even worse regarding any long-term thinking. The ideas you are proposing are excellent, but they take time, and I wonder if any politician can think in that time frame. One advantage of private enterprise is learning from failure and continuing toward the desired goal. With political efforts, any failure is used by the opposing party as an effort to condemn the entire idea - the famous "We told you so."
Possibly, this time things will be different, but I doubt it.
“ideological libertarians” are in short supply these days. Elon Musk’s Tesla rescued from bankruptcy by a sweetheart $4.1 billion loan from the government. Musk moves back to California and play nice guy with Governor Newsome on the heels of collecting $1.2 billion to make some of Tesla’s charging stations open to the public. SVB speaks for itself. It didn’t even have a compliance officer. I’m not saying these examples of government assistance were bad ideas. They served a good purpose. But keep this in mind, because Musk and his ilk just play libertarians on TV.
Industrial policy doesn't have to succeed right away. But, before committing to it, it would be nice to have some prospect that it could succeed in any way, and on any timeframe.
To start: What is the purpose of industrial policy? Is it to revitalize some "key" industries? To protect national security? To achieve widespread prosperity? To advance social justice? And how, exactly, are any of these objectives defined?
Second: Can anyone provide any examples of industrial policy "working" anywhere in the world? For a time, Japan was held up as the example of industrial policy done right: support of the automobile and electronics industries produced world leaders, and Japanese society reaped the benefits. However, Japanese society was also held back by Japanese employment laws (restricting labor mobility), laws protecting small retailers and distributors (which gave retirees or others forced out of large corporations a chance to earn a living), and import restrictions, which reduced choices and standards of living for Japanese consumers. Also, Japanese industrial policy called for 3 auto manufacturers, with no space for Honda; Honda succeeded despite Japanese industrial policy, not because of it.
If Noah thinks the "good" parts of Japanese industrial policy can be separated from the "bad" ones, he should explain how. But even that level of approval should be tempered by Japan's industrial policy, round 2, which targeted robotics and artificial intelligence - the results have had minimal or no success, and no detectable benefit to Japanese society.
If Noah thinks Chinese industrial policy is the success, he should take account of the gigantic misallocation of capital, and precarious health of the banking sector, that he has already noted.
If excessive regulation and veto points for new construction are the obstacles to successful industrial policy, they are also the obstacles to any successful economic development. They shouldn't be torn down to help favored projects; they should be torn down to allow the entire economy to grow and thrive.
If industrial policy is used to establish American capacity for semiconductor manufacture, we should recognize that nearly any actions in this direction violate the basic rules and principles of the World Trade Organization - are we prepared undermine the system we led in establishing?
If industrial policy is the means to achieve progressive goals - whether equity, day care, union wage scales, they should recognize that these objectives don't attract majority support among voters in the country. I know, Noah doesn't really believe this, but it's true. If Democrats use industrial policy as a cover for pushing these goals, they will discredit industrial policy and lose support for the projects that are the ostensible purpose of the policy.
But, to get back to the original questions, what are the objectives of industrial policy, and why does anyone think they can be achieved?
Well wasn't TVA, Bureau of Reclamation (Hoover Dam) and Bonneville Power Authority industrial policy in an earlier Era? We got it to work then, we can get it to work now because it is an overwhelming national imperative.
The column confirms that progressives will use any means possible. After all, the success of progressives shows that virtue signalling works. But on-shoring fab plants is of strategic importance, an importance that should push aside other interests, but does not. Changing the baked-in progressive biases cannot be done overnight, So lets build the fab plants in Canada. They ain't gonna happen here when lards bills for urgent with needless fat.
"This is not to say that progressive goals, such as a diverse workforce or a robust small business sector, are bad ones. But the methods that progressives are trying to use to accomplish these goals aren’t necessarily the right ones."
You have just enunciated the central thesis of neoliberalism except I'd say, "are generally the wrong ones."
But you are writing for progressives and need to be gentle.
U.S. industrial policy in the 1960s was not only the envy of the world, it was incredibly effective. All types of mistakes were made and corrected. Without an industrial policy, there are no railroads, interstate highway system, Silicon Valley, internet, and yes, AI/ML or SpaceX.
I just want to say this: Like "libertarians" generally, the Cato Institute is very good on some stuff -- immigration, drug policy --- and utterly stupid on nearly all macroeconomic economic issues. Their objections to industrial policy, grounded as they are in a silly, obsolete, ideology, can should be ignored.
And, even here in conservative Christofascist Indiana, they are being ignored. My Senators are both numbskulls, but one of them -- Todd Young -- was a sponsor of and hyper-zealous advocate for the CHIPS Act, and the other -- the even more odious Mike Braun -- spends much of his time touring the state promising subsidies and federal support for its farmers and manufacturers. Sure, these clowns will still, when prompted, wax rhapsodic about "free markets" and "capitalism" and vehemently denounce "socialism": But in the next breath, they'll be begging for nearly any all all forms of federal largesse for their constituents. In Red State America, libertarianism is dead.
I agree with industrial policy goals, but we need to play to our strengths, which we seem to have lost site of. The top-down push for progressive goals in each project backed by "checkism" isn't going to work because it already hasn't. We need our entrepreneurs involved.
Check out https://joelelorentzen.substack.com/p/an-invitation-to-know-how