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Robert B. Reich: Warren's plan is a better form of economic nationalism

Trumpian economic nationalism is a zero-sum game in which the industries of the future are dominated either by China or by the United States. We win or they win.

The loudest opposition so far has come from multinational American corporations and their Republican shills in Congress who don’t want tariffs stopping them from making bundles of money around the world.

So is this really the choice — Trump’s zero-sum economic nationalism or unfettered free trade? No. In the 1980s, America debated a third alternative.

The phrase then was “industrial policy” — putting national resources (government spending on research and development, along with tax subsidies and export incentives) behind emerging industries while making sure American workers got the resulting experience and jobs.

Industrial policy centered on a putative deal between the American public and American business: Corporations would get extra resources to grow bigger and more innovative. In return, those corporations would create high-paying jobs in America and focus on sectors promising the greatest social returns.

This wasn’t laissez-faire economics, but nor was it zero-sum economic nationalism. America’s investments in its workers and leading-edge industries wouldn’t prevent other nations from making similar investments. Such competition would be positive-sum: If all nations’ workers became more productive, and all socially beneficial industries grew, the Earth would be better for everyone.

Those of us who advocated such a policy argued that America already had an unintentional one: Our giant defense industry had turned America into the world’s leading maker of bombs, airplanes, satellite communications, cargo ships and container ships, as well as the leader in computers, software and the internet. Our subsidies for pharmaceuticals under the National Institutes of Health were central to our dominance over new drugs.

But America’s hidden industrial policy didn’t necessarily benefit America. Military spending is bloated and wasteful. The NIH doesn’t require drug companies using its research to invest in good jobs in America, or to hold down drug prices.

Moreover, special tax breaks for oil and gas have hastened climate change. The huge 2008 bailout of Wall Street with no strings attached allowed corporate executives to prosper even as millions of Americans lost their homes and savings because of the Street’s gambling addiction.

State and local subsidies to lure companies (think of Amazon’s recent auction for its new headquarters) have merely moved jobs from one state or city to another and are ignored when a company decides it can do even better by moving elsewhere.

Countries such as Germany and China have been far smarter and more open about their industrial policies. Smartness and openness go together. An open, explicit industrial policy becomes a national competitive strategy. A hidden industrial policy becomes a haven for political payoffs — a form of corporate welfare.

Which may be why big business in America killed off industrial policy in the 1980s. Such talk threatened to expose how much public money big business was raking in without doing anything in return.

Sen. Elizabeth Warren’s new “Plan for Economic Patriotism,” unveiled last week, marks a stunningly ambitious revival of American industrial policy.

Warren, a Democratic presidential candidate, berates American companies that “have no loyalty or allegiance” to the nation in which they were born.

“These ‘American’ companies show only one real loyalty: to the short-term interests of their shareholders, a third of whom are foreign investors,” Warren writes. “If they can close up an American factory and ship jobs overseas to save a nickel, that’s exactly what they will do — abandoning loyal American workers and hollowing out American cities along the way.”

But Warren is no zero-sum economic nationalist. She understands that globalization can be a positive force if focused on improving the conditions of a nation’s workforce rather than on maximizing profits.

“Globalization isn’t some mysterious force whose effects are inevitable and beyond our control,” she writes. “No — America chose to pursue a trade policy that prioritized the interests of capital over the interests of American workers.”

So Warren proposes expanding federal research and development, and targeting it on leading technologies. These R&D investments would be “spread across every region of the country, not focused on only a few coastal cities.” Even more critically, the products that emerge would be built by American workers.

Her Green Manufacturing Plan proposes allocating $150 billion annually for the next decade to renewable, green, American-made energy products, along with a dramatic expansion of worker training to ensure Americans have the skills for the anticipated new jobs. It’s a national investment in our future.

“Over the next decade, the expected market for clean energy technology in emerging economies alone is $23 trillion,” she explains.

It would also be good for the world. Warren calls for a Green Marshall Plan, “dedicated to selling American-made clean, renewable and emission-free energy technology abroad and a $100 billion commitment to assisting countries to purchase and deploy this technology.”

As Donald Trump erects tariff walls and rolls back federal efforts to curb greenhouse-gas emissions, Warren is promoting a positive economic nationalism designed both to advance America’s workers and respond to one of the most profound crises confronting the world.

She reasons that if China can commit its national resources to promoting its domestic industry, through plans such as Made in China 2025, and Germany can undertake economic planning, there’s no reason America can’t plan a future of cutting-edge industries and good jobs.

She’s right.

Guest opinion: Provo City School District and city should seek win-win solutions

On Tuesday, June 11, the Provo Municipal Council voted 5-2 to give Mayor Michelle Kaufusi the ability to sell Timp Kiwanis Bounous Park to the Provo City School District.

The park includes 11.2 acres directly adjoining Timpview High School. The sale of at least part of the land is needed, since Timpview uses the baseball field and other fields for sports activities, and has too small of a footprint currently. The sale will also raise funds that will be used for a highly desired large sports complex in south Provo.

On Tuesday the mayor and school district will be meeting about the details of the sale. Unfortunately, many residents are worried that the community’s local concerns will continue to be ignored, despite many promises that their voices matter.

The local community originally donated the land, raised tens of thousands of dollars for playground equipment, and uses the park daily. The former mayor, John Curtis, was unwilling to make the sale of all of the land after meeting with the local community and understanding how much they have invested in the park and continue to use it.

City Councilmen George Handley and Dave Sewell rightfully voted against the sale, because there was no contractual language guaranteeing that at least part of the park could continue to be used by the local community. They agreed with many local community members that there should be a win-win-win solution wherein the city, school district, and local community all benefited.

A very reasonable compromise was raised at the city council meeting, which is to have the city retain a small portion of the land. For example, the city could keep an acre at the far south end of the park next to the well house, which they already need to retain. This would include the playground equipment and serve as a buffer to the houses adjoining the park.

The city should also retain control of the popular bathrooms and parking lot, which are used so frequently by the city and school. Such as solution isn’t perfect for any single party, but it values the needs of all of them and accomplishes the most important goals. The community would retain some of the most used features of the park, even if they would lose control of the pavilion, field, BBQs and volleyball court.

A new park not far away would help offset some of these losses. The school district would expand their land considerably for construction staging and additional fields and come into compliance with legal concerns with practicing on non-school-owned property.

They wouldn’t get all the land they want, but the cost would be reduced some if not all of it was sold. The city would gain most of the money from the sale so they could still support the new south Provo park, though not quite as much as they would have liked. But it would help them save face and support their constituents in the local community.

Alternatively, the school district and city can take a myopic winner-take-all approach that ignores the local community who has sacrificed so much for the park in the first place. If there is any place on earth where people should seek win-win-win situations that value others’ needs equally to their own, it is here in Provo.

The result of the sale next Tuesday will be telling.