The Poverty of Abundance, III

The resistible rise of Industrial Policy

The real theme of Klein and Thompson’s book “Abundance” is the need for Industrial Policy (IP). The dopiest thing is attributing our lack of IP to liberals. That’s the book in a nutshell.

I have a bit of experience with IP. When I began Phase II of my lackluster career at the Economic Policy Institute in 1990, promoting IP was my mandate. Interest in it faded after a few years. It wasn’t hostility, it was indifference. Nixon’s great economist Herbert Stein, a fabulous op-ed writer for the Wall Street Journal in his later years, remarked that when unemployment appears to be too high, there is a surge of interest in IP. When unemployment settles down again, that interest evaporates.

I am still fully on board for IP. The notion that our lack of it is due to liberals is ridiculous. EPI launched in the late 1980s boosting public investment, especially as promoted by the U.S. Conference of Mayors. Interest in investment faded along with the mayors. Bill Clinton promised to advance it. He did not. Klein and Thompson revert again and again to suburban liberals and zoning as the culprits.

It is true that there could be no IP without due attention to social insurance and the safety net. As I’ve said before, there will be no Green New Deal but there should be a New Deal that is green. We would see some gripes from the lefty fringe about corporate welfare — unavoidable for IP in a mixed economy under democracy — but on the whole IP does not ruffle left or liberal feathers. No such disquiet was observed during the Bidens’ efforts in that direction.

What’s a good example of IP? Climate change is one of the urgent motivations. That entails boosting renewable energy rather than fossil fuels and rationalizing the nation’s power grid, among other things. Who is against that? You know.

The fact is that liberals, as well as whatever you want to call “the Left,” are completely on board with IP. They might rank universal health care more highly, though it would not do violence to the concept to classify health care reform as another type of IP, arguably the most pressing, especially in the wake of Trump’s Big Beautiful Bag of Shit. An objective of IP is to expand GDP, which in the case of health care reform, means reducing a huge volume of waste and rerouting equivalent resources to nice things. The biggest obstacle to IP is the opposition to public spending in general, ostensibly for the sake of reducing the national debt. That ain’t the Left.

The Biden Administration to its credit broke some ice for IP, duly noted in the book, in contrast to past centrist administrations. Recall that the Clinton Administration exalted outsourcing and privatization, while betraying its constituents in the fields of labor law reform, free trade, and public investment. Obama was not quite as bad, though his cadre of grifters were not shy about disparaging his critics on the left.

These days the non-defense public sector is under full-scale assault. The Bidens’ fledgling initiatives in IP are the first targets. The most energetic response is not from never-Trumpers or the geezer Democratic Party establishment.

Instead, that establishment is most at pains to attack the Left. Their chief programmatic posture is to unTrump policy. Their own savants acknowledge that is lousy politics. Indeed, if the public favored the state of play before Trump, it wouldn’t have elected him and indulged his myriad perversities.

New thinking would include IP but not be limited to it. It is still necessary, but it is not the easiest politics. “We don’t build enough” or we’re falling behind the Chinese doesn’t burn so hot. Consider what has propelled Zohran to the top of the New York City political heap: free buses. A grocery store near you. The rent is too damn high. The tragedy of IP is that it is more important than its likely political support. Mostly we need an abundance of class politics.