Biden Choking Prosperity With Big-Spending Industrial Policy
The Biden central planners working overtime had their way with free enterprise last summer. Republican senators who voted for this monstrosity should still be ashamed of themselves.
We’ve been talking about President Biden’s regulatory war against America’s economy, with a big hat tip to the Wall Street Journal editorial page and American Action Forum for reminding everyone that in two years the Bidens have slapped on 517 regulatory actions totaling roughly $318 billion in economic costs.
Bad as that is, the socialist central planners in Washington have another 311 regs in the pipeline for another nearly $200 billion in costs. That’s well over $500 billion of regulatory costs on American business. Just think of that: $500 billion.
What does that mean? Lower profits, lower wages, less productivity, and a crushing blow to small business.
A chairman of the Council of Economic Advisers during the Trump administration, Kevin Hassett, told us last night that if we got rid of all the new regs, you could conceivably increase real GDP by as much as 1 percent over the longer term. Think of it.
If you extended the Trump tax cuts, or even better went for a modified flat-tax of 20 percent for personal and corporate income, the Tax Foundation figures you could add almost another half percent in the long run, and that would get you well on your way to a 3.5 percent growth rate — which is what we had between 1947 and 2000, before it slumped to only 1.8 percent over the last 22 years.
Think of the prosperity: Not only more growth from the supply side of the economy, but less inflation. Think about a happy blue-collar middle class family workforce. Think how much easier it would be to slow federal spending, balance the budget, and stop the debt assault.
Yet now we have to contend with the exact opposite.
New information from the so-called Chips act — remember that industrial policy aimed at the semiconductor industry? It will cost $284 billion, and Republicans and Democrats signed up for it.
It’s the exact opposite of my 3.5 percent growth dream. Know what’s in there? Mandated day care, Davis Bacon pay scales, sharing corporate profits with the federal government. Also, total coordination with unions and National Environmental Policy Act compliance, where the Bidens repeal the Trump reforms and now stretch out permits basically for years and years spanning every agency in government.
So, in other words, nothing new will be built.
Between the greenies and the unions and the social welfarists and various interest groups — oh, yes, did I forget that one semiconductor requirement will be diversity, equity, and inclusion? Of course it will be.
Nothing passes the Bidens without DEI or some crazy woke idea that will stop investment, stop new jobs, stop productivity, and stop progress.
This is a perfect illustration of the stupidity of setting industrial policy through massive spending, and as I said it was authorized by a third of the Republican senators along with all the Democrats.
You know, in Washington you get what you pay for. Big spending bills nowadays lead to big woke policies, and that in turn blocks everything. Steve Forbes many months ago labeled this “modern socialism” through the regulatory state.
The Biden central planners working overtime had their way with free enterprise last summer. Republican senators who voted for this monstrosity should still be ashamed of themselves. Big-spending industrial policy never works.
For those concerned about national security and the American chip industry, instead of spending nearly $300 billion for new daycare centers, we would’ve been a lot better off cutting individual and corporate tax rates.
That would have created the incentives and the opportunity to rebuild and onshore American semiconductors.
Save America. Stop industrial policy. Promote growth and prosperity, not central-planning modern socialism.
From Mr. Kudlow’s broadcast on Fox Business News.