Plain English with Derek Thompson "Industrial Policy" Is the Hottest Idea in Economics. What Could Go Wrong?
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Mar 10, 2023 
Greg Ip, the Chief Economics Commentator at the Wall Street Journal, dives into the hot topic of industrial policy under President Biden. He discusses the government's role in supporting green energy and semiconductor manufacturing, debating the risks and rewards of such intervention. Historical precedents highlight failures, but Ip argues for the necessity of government action in today's global challenges. The dialogue also touches on Buy America provisions and 'friend shoring' strategies, revealing the complexities of navigating economic resilience.
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Resurgence of Industrial Policy
- Renewed interest in industrial policy stems from rethinking the free market model after the 2008 financial crisis.
- China's rise, with its government-involved economy, also contributes to this renewed interest.
Semiconductors' Importance
- The US now recognizes semiconductors' central role in modern economies, similar to oil.
- Despite inventing the computer chip, the US lost its leading position in manufacturing.
China's Influence on Chip Policy
- Shifting US-China relations are key to the current focus on the CHIPS Act.
- The fear of China controlling Taiwan's chip production is a major driver for this shift.