Economic Nationalism: Two Can Play That Game!

President Trump’s “America First” policy applies to the economy as well as to foreign policy. He has stood up for American companies, has fought back against unfair practices by China and other competitors, and has browbeaten American companies into creating jobs at home. To some, these policies are reminiscent of the good old “industrial policy” that liberals championed decades ago. The Democrats are starting to catch on.

As many have noted, Elizabeth Warren has taken the lead in promoting Trumpian economics–out-Trumping Trump, as some have said. This is, I think, a sign of things to come. Tucker Carlson, for one, may think that Elizabeth Warren’s pro-America economic policies are better than those of any Republican:

On Tuesday, Warren released what she calls her plan for “economic patriotism.” Amazingly, that’s pretty much what it is — economic patriotism … She says the U.S. government should buy American products when it can, and of course it should. She says we need more workplace apprenticeship programs because four-year college degrees aren’t right for everyone. Well, that’s true.

She says that taxpayers ought to benefit from the research and development that they pay for. And yet she writes, “We often see American companies take that research and use it to manufacture products overseas, like Apple did with the iPhone. The companies get rich, and American taxpayers have subsidized the creation of low wage, foreign jobs.” And so on. She sounds like Donald Trump at his best.

Warren’s approach is being lauded on the Left, as well. Robert Reich, for example, writing at The Guardian:

There’s a third alternative: “industrial policy” – which means putting national resources (government spending on research and development, along with tax subsidies and export incentives) behind emerging industries, while making sure the nation’s workers get the resulting experience and jobs.

Elizabeth Warren’s new Plan for Economic Patriotism, unveiled on Tuesday, marks a stunningly ambitious version of American industrial policy.

There is much more at the link, which is worth reading to see how Leftists think. Watch for her fellow presidential candidates to run with the “industrial policy”–verging on “America First”–platform.

This is a huge topic, which we will be writing about over the next year and more. The Democrats think that working-class voters who went for Trump in 2016 are unsophisticated consumers of economic policy, and will fall for the the “economic patriotism” approach if Democrats make a conscious effort to out-Trump Trump. They may be right.

The only additional comment I want to make now is that I think some critics on the right are unfairly criticizing President Trump for opening the door to 1970s and 1980s-style “industrial policy.” Of course Trump is not a pure laissez faire conservative, but no president ever has been. Tariffs are the main support for the idea that Trump has betrayed the free market, but I don’t agree. Trump has used tariffs or, more particularly, the threat of tariffs, to try to get concessions from other countries like China and Mexico. In general, I think he has been right to do so, although the tactics of trade negotiations can be debated endlessly.

But while Trump has advocated for American industry, he has done nothing along the lines of Democrat industrial policy. The key industry in which today’s Democrats want to implement industrial policy is energy. They want to ban all efficient sources of power–coal, natural gas, nuclear–and endlessly subsidize energy sources that are unreliable and essentially stupid, i.e., wind and solar. Their purpose is to 1) extend government control over the economy, 2) impoverish the United States–it is a foundational belief of modern liberalism that America is too rich–and 3) sponsor industries that are wholly dependent on government favor for their existence, not to mention profitability, and therefore will be stout supporters of the government’s “industrial policy,” forever. Trump has done nothing of the sort, and on the contrary, has supported a free market in energy.

So I think the idea that Donald Trump and Elizabeth Warren are more or less on a par is wrong. That said, there is much more to come.

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