America Has an Industrial Policy - It's Run by the Pentagon

[Capt Bringdown]

America Has an Industrial Policy - It's Run by the Pentagon (RNN)

What do we mean, first of all, by industrial policy? Industrial policy is a range of specific measures that are going to promote new technologies, new industries, that'll be targeted at communities, that'll be targeted at job creation. So it's a whole ac ulation of things that go into creating, for example, successful manufacturing industries, and tied to regions, tied to specific technologies, and so forth.

And the argument from the right is generally, well, that's the government picking winners, and the government is, you know, completely inept at doing anything, so how in the world are they going to be successful in choosing which industries, which regions, which companies are going to be successful, so that therefore we should never pursue anything resembling industrial policy.

The fact of the matter is the U.S. does conduct a rather massive industrial policy, as you said at the outset, through the Pentagon, through the military budget. And in some ways the U.S. industrial policy through the Pentagon has been unbelievably successful. If not for the Pentagon investments in research and development and creating big markets for new technologies, we would not have created a commercial jet aviation industry, we would not have created a commercial computer industry and, most recently, the internet, which came entirely out of 35 years worth of Pentagon research, development, and guaranteed markets to create this technology, which is now perceived as having emerged completely out of some kind of free-market fantasy.
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[boutons_deux]

"Govt must not be in the business of picking winners and losers, and simply cannot create jobs"

-- Repug/VWRC lie machine.

(as if the $1.5T NatSec budget were going only to unionized govt employees and enlisted military).

[Winehole23]

great twitter thread about the history of machine tools.

[Winehole23]

US wants to copy China, but can it?

The U.S. and its allies have long pressed China to stop helping favored industries with subsidies, government preferences and other
interventions.


Now they are beginning to copy it. Last month, the U.S. Senate voted for direct industry subsidies with little precedent: $52 billion for new semiconductor fabrication plants, called “fabs.”…


Chip-manufacturing subsidies are the most prominent of a range of interventions Western governments are rushing out to promote industries they deem strategic, from electric-car batteries to pharmaceuticals. Such interventions have increased sharply in both the U.S. and Europe in the past decade, according to Global Trade Alert, a trade-monitoring group.


Collectively, this represents an embrace of “industrial policy,” the idea that governments should direct resources to industries critical to the national interest rather than leaving things to the market.
Industrial policy was once commonplace among market-based democracies…They pulled back over recent decades….


China, though, never retreated. Even after it introduced market reforms in 1979 and accelerated them after 1992, the state continued to guide economic development through ownership of enterprises and control over credit, government purchases, tax preferences, land and foreign investment. Since 2006 the ruling Communist Party has put priority on catching up to the West technologically.


Previously called “Made in China 2025,” this endeavor was renamed “dual circulation” last year. In a speech, President Xi Jinping said the goal was to eliminate China’s dependence on other countries while increasing their dependence on China. It could then threaten to cut off foreign customers to deter aggression, he said.

https://www.wsj.com/articles/subsidi...en-11627565906

[Winehole23]

A recent book, China RX: Exposing the Risks of America’s Dependence on China for Medicine by Rosemary Gibson and Janardan Prasad Singh, appears not to have gotten the attention it warrants..


The big message of Gibon’s and Singh’s book is that the US relies on China for the production of active ingredients in drugs and in many cases, of the medications themselves, to the degree that we would have a public health crisis if supplies were interrupted. As Gibson said on C-SPAN:

Many people that we spoke to, both former government officials and some in industry said that if China shut the door on exports, within months, pharmacy shelves in the United States to be empty, and hospitals would cease to function.

And don’t assume generics king India would step into the breach. India gets many of the active ingredients for its pharmaceuticals from China. Gibson forecasts that China will overtake India in generics manufacture within a decade.


As Gibson explains, the US no longer makes its own penicillin, in part because China dumped penicillin in 2004, driving the last US plant out of business.


The medications where the US relies on China include heparin, a blood thinner that among other things is used for IV drips. No heparin, no IV treatments. Due to the difficulty in tracing the source of drug company ingredients, the authors could make only case by case investigations, but they China production to be critical for treatments for Alzheimer’s HIV, depression, schizophrenia, cancer, epilepsy, and high blood pressure.

https://www.nakedcapitalism.com/2018...ina-drugs.html

[Winehole23]

from the WSJ article

In U.S. there has long been broad support for government funding of basic research and development. One result is that the U.S. still leads in inventing and designing new technology, even though the manufacture of the resulting products moved abroad, mostly to East Asia…


Advocates of industrial policy in Congress and the White House are no longer satisfied simply promoting innovation; they want the resulting products to be made in the U.S. They have multiple goals: to secure U.S. supply, create jobs and ensure that the resulting intellectual property stays in the U.S. rather than being transferred to Chinese compe ors via outsourcing.


Last month, the White House proposed a breadth of tools to boost domestic production in four sectors deemed vital to the supply chain: semiconductors, batteries, specialized minerals and pharmaceutical ingredients.


It proposed using several existing federal loan, tax-credit and R&D programs to support electric-vehicle battery manufacturing. To reduce dependence on foreign supplies of neodymium magnets, important components of motors and other devices, it suggested imposing tariffs under the same 1962 national-security law that former President Donald Trump used to impose tariffs on imported steel and aluminum.


The administration also announced plans for a public-private consortium to revive domestic production of 50 to 100 critical drugs, as well as plans for a domestic lithium-battery supply chain.

[Winehole23]

the US, contrary to our own popular mythology, does industrial policy by giving certain sectors tax breaks, cheap funding, government backstops, and/or direct government spending. Those industries include heath care, real estate, higher education, banking, and arms making. In other words, like Moliere’s Bourgeois Gentilhomme, who was surprised and pleased to learn that he was speaking prose, the US has long engaged in industrial policy, but by default, to serve special and powerful rather than national interests.

https://www.nakedcapitalism.com/2021...-using-it.html

[Winehole23]

autarky is good

Last August, Neopharma of the United Arab Emirates declared bankruptcy and shuttered the 43-year-old plant, leaving the U.S. dependent solely on penicillin from China. During the pandemic, Chinese-made products such as ventilators and masks were in short supply in the U.S., highlighting the need for flexible, domestic manufacturing.


“The reconstruction of our domestic manufacturing capability for life-saving penicillin is a national imperative,” Harshberger said earlier this year. “Our reliance on China and foreign-sourced raw materials for antibiotic production presents a severe deficiency in the reliability of the supply chain and actively undermines our national security and public health interests.”


After the plant’s prior closure, Harshberger lobbied the U.S. Cybersecurity and Infrastructure Security Agency (CISA) to retain its critical infrastructure designation.


In April, Jackson Healthcare revealed that it had purchased the facility. Previously, the site was owned by GlaxoSmithKline of the U.K. and Dr. Reddy’s Laboratories of India.


Amoxil represents 30% of the antibiotics prescribed in America, USAntibiotics said. The company will be the only firm in the U.S. licensed to make the drug. Most penicillin manufacturing has moved out of the country as patents expired and generic manufacturers rushed to the market.

https://www.fiercepharma.com/manufac...pendence-china