Oren Cass Notices One of Industrial Policy’s Fatal Flaws

One prominent advocate of giving politicians more control over the economy seems to have realized one of the idea’s fatal flaws.

All the politics.

In a nutshell, that’s the complaint lodged by American Compass executive director and industrial policy superfan Oren Cass last week at a conference hosted by the Information Technology & Innovation Foundation. If only progressives would be willing to drop their own political goals, Cass argued, there could be bipartisan agreement about what’s necessary to advance the “national good.”

Cass was responding to a question from Wall Street Journal economic writer Greg Ip about the Biden administration’s decision to mandate that semiconductor companies receiving subsidies through the CHIPS and Science Act to expand domestic manufacturing production must provide child care to construction workers and permanent employees. Cass called it “extraordinarily disappointing” to see a Democratic administration attaching Democratic goals to the CHIPS Act, which American Compass had cheered as it moved through Congress.

“This is the political obstacle right now to continuing to make progress in this direction,” Cass said, referring to Democrats’ eagerness to lard up industrial policy bills with seemingly unrelated issues. That includes not only the child care mandate but a ban on stock buy-backs, a requirement that union-approved “prevailing wages” are paid on CHIPS-funded construction projects, and more. Some of that was in the text of the bill when it passed—with the support of 17 Republican senators—and some of it, most notably the child care mandate, has been created by the Biden administration as it rolls out the specifics of the subsidy program.

That has poisoned the well for future bipartisan industrial policy deals, Cass argued. “If you are ever going to have a bipartisan consensus on making these kinds of investments, you have to be willing to take the social priorities on which there is no bipartisan agreement and put them to the side for the sake of the national good,” he said.

We all might wish that the politicians would stop caring about everything except the issues we think are most important, but any serious understanding of American democracy requires starting out by