Great set of comments and certainly true in the moment. An historical look might show a more complex and less hypocritical picture. U.S. military spending during the Cold War was not directly an industrial
policy, but it acted as a quasi-industrial policy for America. Japan, South Korea, China, and others then moved to adopt straight out industrial policies in an effort to catch up to or overtake the U.S.
The U.S. responded by claiming unfair trade, complaining to the WTO, and trying to negotiate with Japan and others to drop or change their industrial policies. Then China came along with a huge drive to catch
up to and overtake the U.S. Initially, the U.S. foreign policy/trade and economics establishment tried to counter with “engagement”, Bob Zoellick’s “we want China to be a responsible Stakeholder in the liberal, rules based order” and endless negotiations and
initiatives to increase dialogue. Then China adopted Made in China 2025, making an outright declaration of aiming to beat the Americans in all the major industries of the future. Then China began to achieve that objective.
Now the U.S. establishment is being driven to eat its words and to turn to outright industrial policy in tacit admission that free trade is not consonant with being competitive in strategic industries. Clyde
From: Salon <salon-bounces@listserve.com>
On Behalf Of Chas Freeman via Salon
Sent: Sunday, May 12, 2024 9:44 PM
To: salon@listserve.com
Subject: [Salon] Revealing exchange with Janet Yellen
Fantastically revealing exchange with Janet Yellen. The interviewer asks her: "[Regarding China's] overcapacity in advanced
products, electric vehicles, batteries, all of those things. Is it possible we’re just being outcompeted by the Chinese in those fields?" Yellen replies "Well, we don’t think the playing field is level." Which essentially means "yes we're being outcompeted
but the Chinese don't play fair"... She goes on to explain that it's because "China is massively subsidizing investment in this set of industries". Which by the way has been repeatedly debunked like here in this Bloomberg article:
https://bloomberg.com/opinion/articles/2024-03-25/china-easy-money-isn-t-driving-this-clean-tech-boom…
To which the interviewer replies: "Subsidizing more than we are with our investments in the CHIPS Act and the infrastructure and all that? Because we’re pouring billions — you are pouring billions in." And there Yellen admits "yes, we’re very explicitly subsidizing
investments in these important strategic areas." The VERY thing she's complaining the Chinese are doing!!! You literally couldn't make it up
Source:
https://marketplace.org/2024/05/09/inflation-is-not-yet-where-it-needs-to-be-treasury-secretary-yellen-says/