This Is What Happens With Industrial Policy
The Chips Act has been turned into a political Christmas tree with a present underneath for every special interest.
If there is one timeless truth about industrial policy, it is that handouts always come with handcuffs. As your editorial “Biden’s New Industrial Social Policy” (March 1) notes, it is almost impossible to pass a massive industrial policy bill without extensive political meddling coming into play.
Congress had a chance to minimize some of that damage with a more narrowly drawn effort focused on basic R&D, which is somewhat less susceptible to the sort of gaming now being imposed by the Biden administration. Unfortunately, politics as usual prevailed and Congress made the Chips Act into a political Christmas tree with a present underneath for every special interest.
Sen. John Kennedy (R., La.) described an early version of the measure as an “orgy of spending porn.” Hundreds of billions of dollars and thousands of pages later, the political demands that will make the effort even more costly and inefficient over time are now arriving. The only winners will be those vacuuming up the political largess. The losers, as always, will be the taxpayers.
On top of all the waste, no one bothered asking how American competitiveness was going to be enhanced by adding even more to a $31 trillion debt—more than $1 trillion of it held by China—and expanding the federal regulatory leviathan through technocratic market meddling and industrial micromanagement. We won’t beat China by becoming China.
Senior fellow, R Street Institute