Over the past decade, New York state spent almost $1 billion to build a quarter-mile-long factory for Elon Musk’s solar panel manufacturing. And $240 million on equipment that would produce 3 million panels annually. Tesla now leases the plant from the state for $1 a year; most of the manufacturing equipment, the Wall Street Journal reports, “has been sold at a discount or scrapped.” The plant was supposed to become a hub attracting ancillary enterprises; it has attracted a coffee shop. A fan of this project offers a minimalist defense: The site now provides more jobs than it did as a vacant lot.
The town of Mount Pleasant has had an unpleasant experience with Wisconsin’s fling with industrial policy. As president, Donald Trump, who shared his successor’s enthusiasm for making the private sector semipublic, said a proposed factory manufacturing LCD panels would be the “eighth wonder of the world.” As Peter Suderman has reported for Reason, after the town demolished dozens of homes and spent hundreds of millions on land and infrastructure for a still-uncompleted Foxconn factory, the town had debts larger than its operating budget. Wisconsin has cut its promise of about $4 billion in subsidies as Foxconn has cut its estimate of new jobs from 13,000 to perhaps 1,450.
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Today, industrial policy’s political purpose is to defuse angry populism that is blamed on “deindustrialization” displacing workers. But declines in the portions of labor forces devoted to manufacturing are normal as nations become richer, regardless of wide variations in nations’ economic policies. And the U.S. government’s would-be industrializers should hope that surly populists, who are eager to cause society’s upper crust to crumble, do not notice how industrial policy makes eager bedfellows of government bureaucrats and corporate elites — for their mutual benefit.
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Industrial policy is also considered urgent because of America’s supposed economic anemia. The Economist, however, notes that America’s 4 percent of the world’s population has produced 25 percent of global output since 1980 despite China’s rapid rise. The poorest U.S. state, Mississippi, has a higher average income than France. The world’s top five corporations in spending on research and development are all American. Money invested in the S&P 500 in 1990 is worth four times more than if it had been invested in any other wealthy country’s stock market. The real value of U.S. industrial output is 71 percent higher than at the end of the early 1990s recession.
A significant part of the problem with net zero comes not so much from the project itself, which is bad enough, but from the lunatic way in which it is being implemented: C doesn’t follow B, B doesn’t follow A. The reworking of an economic, social, and industrial order (because that’s what this “race” is intended to do) ought to be arranged in an order that makes sense. It is obviously a bad idea to switch off one source of power without making sure first that there is another ready to take its place, particularly when the result of other aspects of decarbonization will be to increase demand for the electricity that is going to be in shorter supply. That an unreliable power supply will deliver yet another blow to New York City at a bad time only makes things worse.
Brian Garst reports on drug-makers’ abuse of the U.S. patent system.
Jack Nicastro is correct: “antitrust concerns in the gaming industry are misguided.”
Vance Ginn explains that “barriers to immigration are barriers to economic prosperity for all.” A slice:
Restricting immigration limits the ability to work with individuals who possess the skills and talents that could enhance productivity and innovation in the long run, and the whole country suffers as a result. State and federal resources that discourage immigration would be better invested by reforming the path to immigration so that individuals who want to contribute to American society can do so with relative ease.
Anyone taking health advice or learning epidemiology from the @nytimes will be doomed to isolation and ignorance.
