Raimondo, the commerce secretary, mentioned China just once in a major address at Georgetown University’s School of Foreign Service in February. She focused more on rebuilding national production capacity, situating the CHIPS and Science Act as a successor to the land-grant university system under Lincoln, nukes and scientific innovation under Roosevelt and Truman, and the commitment to set foot on the moon under Kennedy. And like her colleagues, she highlighted jobs: “We are in the middle of a tremendous labor shortage, and the skilled workers who will fill these jobs have never been in higher demand.”
Heather Boushey, a member of Biden’s Council of Economic Advisers, took on the “picking winners and losers” critique of industrial policy in a May address at the Peterson Institute for International Economics. She said that “the market was not designed to promote the general welfare.” Markets, she said, “are a tool for achieving our goals, not the goal themselves.” “In this moment of disequilibrium,” she continued, “we need new ideas and new tools.”
There’s a lot more but I want to wrap up with Yellen, who spoke one week before Sullivan, on April 20, at the Johns Hopkins School of Advanced International Studies. She cited a litany of serious American complaints about China, but accentuated the positive a bit more than some of her colleagues in the administration. For example, she said, “China’s economic growth need not be incompatible with U.S. economic leadership.” And: “We do not seek to ‘decouple’ our economy from China’s. A full separation of our economies would be disastrous for both countries. It would be destabilizing for the rest of the world.”
Since taking office in 2021, Yellen has been advocating what she calls modern supply-side economics. Unlike standard supply-side economics, which focuses on tax cuts, her version is about expanding the productive capacity of the U.S. economy through public as well as private investment, including in people. “At a basic level, America’s ability to compete in the 21st century turns on the choices that Washington makes — not those that Beijing makes,” Yellen said at Johns Hopkins. That’s a can-do interpretation of the Biden plan.
Critics on the right fault the Biden administration for doing too much. Government planners can’t see what’s coming any better than the private sector, and even if they could, politics leads them to make bad choices, Scott Lincicome, a vice president at the libertarian Cato Institute, has argued. On the left, Jeremy Rifkin, an author and consultant, wrote to me that the Biden officials are “trapped inside a theoretical bubble”: “They know that there is something fundamentally wrong at the heart of the capitalist system but are unable to escape their own philosophical foundations.”
Meanwhile, there’s old Joe Biden, palling around with the guys down at the plant while the debate over industrial policy rages around him. The brilliance of his plan is its simplicity. He just wants to create more jobs. Good, union jobs that support families. And that’s the God’s honest truth!
