The NYT discusses the extent to which the United States will be pursuing industrial policy in its efforts to reinvigorate the Big Three. The article implies that industrial policy is somehow alien to the United States. In fact, the United States has long had implicit industrial policy. In the early part of the 20th century the United States had some of the highest tariffs in the world with the explicit goal of developing domestic industry. In the post-World War II era, the government adopted a variety of policies with the explicit purpose of promoting the pattern of suburban growth that fueled the economy for the last 60 years. This included a variety of subsidies for home ownership and the construction of the highways. (Low-interest mortgages to veterans are an often overlooked subsidy. Until the end of the draft in the 70s, nearly all men served in the military and therefore qualified for veterans mortgages.) In short, industrial policy would not be new to the U.S. economy, even if an explicit discussion of it might be.
--Dean Baker
