We argue that the turn to industrial policy can play a vital role in reconnecting finance to the real economy—but only if industrial policy is seen holistically as a comprehensive economic development strategy, and not just as a way to onshore the making of particular widgets.
Thus, the attaching of conditions to industrial policy loans and grants should be seen as a normal part of development lending (as it is at World Bank and elsewhere) - not a distraction. @lenorepalladino and @Isabel_Estevez_ have been really sharp on this. rooseveltinstitute.org/publications/t…
We conclude on the value of a "public option for private equity" in the industrial policy space, including through a National Investment Authority. This can help get around capacity constraints in existing federal agencies, and revives and improves on best practices from FDR era.
Movement towards NIA-like institutions can happen even in divided government, as the 1932-33 genesis of the Reconstruction Finance Corporation shows. politico.com/news/magazine/…
BREAKING from @AP: @Energy agency announces $6 billion to slash emissions in industrial facilities.
@JenMcDermottAP @anniesartor @SecGranholm @alizaidi46 and me on why this is game changing, and could allow the US to catch up/ lead on industrial decarb. apnews.com/article/climat…
The mix of projects funded here is exciting, including a range of technologies to be deployed by US leader @CLE_CLF, and even projects by Sweden's SSAB. energy.gov/oced/industria…
"EVEN IF YOU’RE CONVINCED that unionized labor is sclerotic and expensive and an impediment to production, cutting them out creates the very real risk of losing the coalition necessary to sustain green industrial policy."
@ddayen responds to @ezraklein. prospect.org/economy/2023-0…
I am sympathetic to Klein's wish to live in a society with more corporatist labor arrangements.
https://t.co/5jiumaovWrnytimes.com/2023/07/16/opi…
Want government that builds super fast, without the pesky guardrails of civil society input, local government consultation, or environmental or safety permitting?
The last 70 years of development economics has been technocrats & engineers slowly learning that you can't wish away politics and institutions. If your developmental strategy can't work politically and institutionally, it can't work.
That's why @ddayen's framework @TheProspect of A Liberalism That Builds Power is so useful. If you try to Either/Or your way through economic development or (countervailing) power-building, you could end up with neither. prospect.org/economy/2023-0…
Here are reactions from @SecYellen@SecGranholm@SecretaryPete, noting the boom in clean energy investments and production, that will now have incentives to use domestic supply chains.
These new incentives will run through long-standing programs of the US government: clean energy production tax credits (PTCs) and investment tax credits (ITCs).
"Some old school economists who have been peddling the failed or damaging policies the administration has sought to undo decried the fact that the new approaches represented too much meddling with markets by government officials.
But of course, that is just the point."
"Finally, after many decades of deferring to the financial and corporate interests who also happen to be big political donors, a president and his team have come along to say, “enough.” It is time to make economic decisions that serve all the people and address the damage done."
What is the Biden administration’s international economic agenda?
National Security Advisor Jake Sullivan (@JakeSullivan46) kicks off a @BrookingsInst talk on the New Washington Consensus.
Elements of new thinking:
- Markets don't always allocate capital in socially optimal ways
- Trade liberalization shouldn't be pursued for its own sake
- Privileging finance over real economy was a mistake
- Economic integration doesn't lead to alignment on other values
- Climate crisis and economic inequality change everything
- Trickle down, labor union squashing, tax cuts, deregulation, corporate concentration made things worse
- China shock wasn't adequately anticipated or addressed
- Combined result endangered democratic stability