Speaking in Pittsburgh last week – on how to revitalize American industries — the president of the Brookings Institution think tank told a gathering of business leaders that the “vast majority of Americans want more policy over politics.”
We would be hard-pressed to disagree with Cecilia Reuse. But we are forced to shudder at some of one of her colleague’s “policy” prescriptions.
As reported by the Post-Gazette, Alban Berube, director of Brookings Metro, told business attendees that it will take more than “local bootstrapping to build competitive industries and plentiful jobs at scale.
“Central governments around the world are adopting more purposeful policies to catalyze local investment in business clusters,” Berube said.
The P-G says he then “outlined three potential paths for government action that voters can choose this election: direct spending on advanced industries and local clusters, broader tax and regulatory relief, or higher trade barriers for foreign advanced industry products and services.”
While we indeed would wholeheartedly support “broader tax and regulatory relief,” talk of “central governments” directly “spending on advanced industries and local clusters” smacks of onerous “industrial policy.”
Seriously, do we yet again have to run down the long list of government-favored – and taxpayer subsidized – failures?
While reasonable people can disagree about “higher trade barriers for foreign advanced industrial products and services” – think tariffs — the manifest problem becomes higher prices and reduced economic growth.
Still, Jake Haulk, president-emeritus of the Allegheny Institute, argues for an exception:
“When countries like China impose huge trade barriers on U.S. imports, we need to respond,” the Ph.D. economist notes.
As Erica York, a senior economist and research director at the Tax Foundation, notes:
“American history provides an abundance of examples of politicians using tariffs to protect domestic industry.
“Taken together, the examples show that tariffs do not generate higher levels of employment or production for the economy overall; they do not ensure the long‐term health of the industries being protected or fundamentally alter the trade balance; and they serve not the strategic interests of the nation but the parochial interests of politicians who get to enrich preferred companies and workers by imposing diffuse and mostly hidden costs on the rest of the U.S. economy.”
Clearly, the best path for economic growth in Greater Pittsburgh and nationwide, not more government but less. Constant command-and- control government meddling in the free market only makes the economy weaker and all of us poorer.
Stopping such nonsense must be America’s new and constant priority. It’s past time for economic policy to take the path less taken.
Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).
