New York Times: The Biden Team Wants to Transform the Economy. Really.

February 11, 2021 Media

Anyone searching for an economic road map to the Biden presidency might find hints of one in a 40-page research paper written, appropriately enough, by the United Automobile Workers union. The document, originally published in 2018 and titled “Taking the High Road: Strategies for a Fair E.V. Future,” argued that even in the face of foreign competition, the American automobile industry could continue to provide well-paying manufacturing jobs — but only if the government invested huge sums in electric vehicles. The technology highlighted in the report, like prismatic cells for storing electrical charges, was cutting-edge, but the economic thinking behind it was decidedly old-school. Some passages, in their America First-ness, read as if they could have appeared in a Ross Perot ad from 1992 — or, for that matter, a Trump ad from 2016. The U.A.W.’s researchers insisted, for example, that critical parts like batteries must be produced at home, not by rival industrial powers. “The economic potential of E.V.s will be lost if their components are imported,” they wrote. “Advanced vehicle technology should be treated as a strategic sector to be protected and built in the U.S.”


A growing number of progressives have also been focusing, in recent years, on reining in corporate giants like Google and Amazon; their position is that these companies abuse their market power to kneecap competitors and take advantage of consumers. Some of the activists and politicians involved in this effort are skeptical that industrial policy will amount to much more than funneling taxpayer money to wealthy corporations. “I worry about it,” says Matt Stoller, the research director for the American Economic Liberties Project, an antimonopoly advocacy group. “I hope when they put this together, they’re not just giving money to monopolists.” Stoller concedes that industrial policy can be effective, but only if designed and implemented correctly. He cites the successful creation of coronavirus vaccines as an example. In that case, the pharmaceutical companies that produced a viable vaccine stood to earn far bigger profits than those that didn’t. “The government didn’t just write checks to Pfizer,” Stoller says. “It told seven companies: ‘Go develop a vaccine — it’s a competition. Compete.’”

And then there is the near-inevitability that one or two senators will use their decisive vote to dictate the terms of a bill — most likely when a conservative Democrat balks at the cost. By contrast, says Rahm Emanuel, who served as Obama’s first chief of staff, the possibility of passing legislation with Republican votes shifts power back into Biden’s hands. “If they think you’re assembling something bigger,” Emanuel says, “you slightly dilute their leverage.”

There is a pool of Republicans who, at least in theory, may support investments in emissions-reducing technologies. Several Republican senators hail from states that would directly benefit, including Kansas and the Dakotas, located in one of the largest wind corridors in North America. And as fossil-fuel companies continue losing wealth and stature, their influence over the Republican Party may recede.