The idea of introducing more central planning to the U.S. appears to be brewing in the Trump Administration, led by the crony statist Commerce Secretary Wilbur Ross.
Sadly, Ross has Trump's ear.
Here's what is going down (via Rana Foroohar at The Financial Times)
Industrial policy is a third rail term in the US. It brings to mind images of Soviet-style planned economies, or government-designated corporate winners and losers, something that has traditionally evoked fear in American conservatives as well as many liberals.
That may be changing, as a group of industrial chief executives, such as Dow Chemical’s Andrew Liveris, IBM’s Ginni Rometty and General Electric’s Jeff Immelt, is encouraging the Trump administration to craft a modern policy by connecting the dots between educators, job creators, regulators, consumers and workers. Working with Wilbur Ross, commerce secretary, the chief executives are weighing in on everything from how to reshape education in order to train a 21st-century workforce, to which regulations should be overturned to unleash “animal spirits”.
The goal, says Mr Liveris, is profound: to move America’s economy from one based mainly on consumption and cheaper prices to something that looks a lot more German, with more vocational training programmes and higher skilled, higher paid workers churning out more upscale exports. “The cost of free markets and lower prices was never really explained to the American people,” says Mr Liveris. He notes that, of all the jobs lost since 2008, 20 per cent were skilled positions. The only way to get them back, he says, is to start acting more like other big economies in which government and private sector work more closely together.
I spotted the possibility of Trump favoring an industrial policy early last year when he was still candidate Trump. In April 2016 in a post titled, The Most Under-Reported Sentence in Donald Trump's Foreign Policy Speech, I wrote:
So it should not come as a surprise that the industrial sector of the military-industrial-complex is working on such an industrial policy program.Yesterday's foreign policy speech by Donald Trump has received extensive coverage.However, one sentence in his policy speech is not receiving any coverage in mainstream media. The sentence deserves extensive coverage,It is this sentence:We need to think smarter about areas where our technological superiority gives us an edge. This includes 3-D printing, artificial intelligence and cyberwarfare.In the paragraph above this, Trump said, "We are also going to have to change our trade, immigration and economic policies to make our economy strong again – and to put Americans first again. "This suggests that Trump is thinking in terms of some sort of national industrial policy, perhaps infant industry protection.A google search for news relating to "Trump industrial policy'" turned up my comment yesterday on the matter but there were no other links related to Trump's speech and industrial policy.
Of course, such a program will benefit no one other than the cronies at the table and suffocate the rest of the economy.
At I pointed out
in the April 2016 post, Murray Rothbard considered industrial policy to be a left-wing Keynesian policy (See: Making Economic Sense chapter 32).
Left-wing Keynesians, the hallmark of Democrat administrations,[as opposed to] conservative Keynesians [who] tend to favor the freemarket, at least in rhetoric, whereas left-Keynesians are morefrankly in favor of “industrial policy,” “economic strategy,” andan activist “partnership of government and business.”It should also be noted that in that chapter Rothbard wrote:
We will receive endless assurances that the increased deficitsWhich is exactly what Trump is promoting now. Just last week, Trump told Fox news anchor Martha MacCallum:
will “only be temporary,” to be eventually offset by increased
production and a growing economy. There will be endless
malarkey about monetary and fiscal stimulus by Clinton helping
us to “grow out of our deficit.” (Wanna bet?)
[Y]ou'll see that it'll take a period of time and you're going to have some deficits in the meantime.Is it time we start calling Trump what he is when it comes to economic policy, a left-wing Keynesian?