My intrepid Mercatus Center colleague Veronique de Rugy is unimpressed with economics Nobel laureate Michael Spence’s uncritical swallowing of the assertions of some industrial-policy proponents. A slice:
Another week, another reminder that heavy-handed government industrial policy is in fashion. Nobel Prize-winning economist Michael Spence recently endorsed it as embodied in the newly passed “CHIPS+” legislation, an attempt to bolster America’s semiconductor industry. The endorsement, like so many, rests not on evidence or economics, but on blind faith in Congress and the administration.
Spence writes that “the infrastructure bill, the CHIPS Act, and the (Inflation Reduction Act) amount to a stunning increase in long-term investment in America’s growth potential, and in balancing out the various dimensions of its growth pattern, prominently for carbon dioxide emissions reduction and sustainability.”
In other words, these new expenditures — amounting to more than $1 trillion — spent by the same government that can’t deliver the mail efficiently or run trains for a profit are supposed to generate the advertised abundance of goodies. We’re to trust that these monies, disbursed by the same administration that botched the withdrawal from Afghanistan, will achieve only successful results.
Color me unconvinced.
Politicians and trial lawyers are sticking up companies across the pharmaceutical supply chain like Bonnie and Clyde. Riding shotgun is federal Judge Dan Aaron Polster, who on Wednesday ordered CVS, Walgreens and Walmart to pay $650 million to two Ohio counties to remedy opioid abuse. Now on to the next raid.
The most generous thing that can be said about CRT is that it makes naïve and banal misdiagnoses of social problems, some of which are still very real.
This development—a new conservatism rooted in free market skepticism—carries serious risks for American workers. And one need look no further than the American Economic Forum to see those risks.
Take keynote speaker and former U.S. Trade Representative Robert Lighthizer, who lauded President Trump’s trade policy of “tariffs, threat, negotiations, and industrial policy” and denounced free traders as “materialistic” fools obsessed with consumption. Pushing a “balanced trade” alternative that favored production, he added that “the best way to fix consumerism is to raise prices.”
Leaving aside the spectacle of a multimillionaire lawyer telling inflation‐wrecked Americans to embrace even higher prices, Lighthizer reveals a deep and dangerous misunderstanding of basic economics. Workers don’t labor for national greatness; they labor to consume goods and services.
A price‐hiking attack on “consumerism” is, therefore, an attack on all workers.
“Anticonsumer” trade policy also harms workers in other ways, as Lighthizer’s tenure demonstrated. Tariffs on metals and Chinese imports, for example, harmed import‐consuming manufacturers, subjected exporters to foreign retaliation, deterred investment, and fueled a lobbying boom as thousands of companies begged for exemptions or for their own tariff protection. (Maybe those K Street jobs are what former lobbyist Lighthizer meant by “pro‐worker” trade policy?)
In 2021 Walensky said that vaccinated people “do not carry the virus” and Fauci said they would become “dead ends” for the virus. Don’t let officials pretend they never made these claims. Many people got the vaccine precisely because they believed it would stop the spread.