Plain English with Derek Thompson "Industrial Policy" Is the Hottest Idea in Economics. What Could Go Wrong?
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Mar 10, 2023 
Greg Ip, the Chief Economics Commentator at the Wall Street Journal, dives into the hot topic of industrial policy under President Biden. He discusses the government's role in supporting green energy and semiconductor manufacturing, debating the risks and rewards of such intervention. Historical precedents highlight failures, but Ip argues for the necessity of government action in today's global challenges. The dialogue also touches on Buy America provisions and 'friend shoring' strategies, revealing the complexities of navigating economic resilience.
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Historical Industrial Policy
- Alexander Hamilton, the first Treasury Secretary, supported industrial policy.
- The US has a history of industrial policy, including tariffs and subsidies.
Industrial Policy's Bad Reputation
- Industrial policy has a bad reputation because governments are seen as poor at picking winners.
- Past industrial policy failures, like Solyndra, are often remembered, while successes are overlooked.
Government's Role in Tech Success
- Government investments in the Defense Department contributed to Silicon Valley's success.
- Government investments also played a role in Tesla's rise, creating the world's richest man.