On “hybrid industrial policy”
I appreciated that @ChadBown and @D_A_Irwin did something here that few in international economic policy debates do: attempt to respond to a new policy demand that does not comport with their priors / preferred toolkit. Also appreciated the call for international coordination so we don’t end up with a subsidy war.
Chad and Doug also express concern that “budget-conscious hospitals” not see costs go up in “a health care system that is already extraordinarily expensive.” Locally produced PPE could be more expensive than Chinese products. But the major cost drivers of US healthcare come from mergers, insurance, and IPR protections, as @dreaflynn @rakeen_mabud @emmachessen @DeanBaker13 and others have documented. Address those, and locally produced PPE may not seem cost prohibitive. (rooseveltinstitute.org/publications/p…)
Finally, I appreciated Chad and Doug’s nod to concerns about income concentration at the top. However, this argument — why raise taxes on companies if you then give them subsidies — missed important dimensions of policy design and purpose IMO
Namely, the “who decides” and “towards what end.” It’s true, you could collect $10 in taxes from an MNC and then give them $10 in subsidies and the MNC’s bank balance is the same. But both transfers are now a part of democratic decisionmaking in a way that they weren’t before. And the redeployed monies could be subject to conditions that did not exist before, like union card check neutrality and decarbonization, egs in this @TheProspect roundtable. Not all Hamiltons are equal. (prospect.org/economy/public…)
In short, I appreciate the effort to meet new ideas half way rather than reflexively gatekeeping them out. That’s progress, and can lead to more fruitful policy conversations.
(Adapted from this thread.)