Germany is also an off-point example. Despite right-wing nationalists — also some left-wing progressives like Elizabeth Warren — pointing to the German economy as industrial policy done right, policymakers there have long avoided anointing their industrial companies as national champions deserving of special help. When Germany’s economy minister suggested creating a state investment fund to pre-empt the foreign takeover of German firms earlier this year, some of his fellow party politicians, noted the Financial Times, “accused him of betraying the party’s free-market principles. Business leaders have also lambasted the minister’s plans, saying they will lead to excessive state interference in the economy.”
One has to assume that conservative converts to industrial policy are smart enough to know the futility of a back-to-the-future economic policy meant to restore an industrial American economy long past. Even if the manufacturing share of the American economy rose, much of the work would be done by robots not humans. The age of mass industrial employment is over. And there are downsides. Even Cass correctly concedes that “opportunities for regulatory capture will abound, market distortions will emerge.” Hardly small considerations in a demographically challenged economy plagued by historically slow productivity growth. And as of now, Trumponomics has hardly produced a manufacturing renaissance. U.S. manufacturing activity slowed to near a three-year low in June.
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