Elizabeth Warren’s latest policy plan reads like a work of speculative fiction written off the prompt: What would Donald Trump’s economic agenda look like if he actually cared about working-class decline, believed in climate change, and could read multi-page documents?
In “A Plan for Economic Patriotism,” Warren rattles off a list of quite Trumpy complaints about the state of the U.S. economy. The senator is sick and tired of American companies that “have no loyalty or allegiance” to the country they were born in. “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.”
The senator then turns her fire on the politicians who abetted these betrayals — mocking their attempts to use “globalization” as an alibi. “Globalization isn’t some mysterious force whose effects are inevitable and beyond our control,” she notes. “No — America chose to pursue a trade policy that prioritized the interests of capital over the interests of American workers.”
Donald Trump expressed nearly identical sentiments at a campaign event in Pennsylvania three years ago this month.
“Globalization has made the financial elite who donate to politicians very wealthy. But it has left millions of our workers with nothing but poverty and heartache,” the GOP nominee told a crowd of supports at metal recycling plant outside of Pittsburgh. “This is not some natural disaster. It is politician-made disaster.”
And yet, if Warren’s diagnosis largely resembles the president’s, her prescriptions are quite different. In a 10-page Medium post outlining her vision, Warren does not promise to write sternly-worded tweets to companies that shift production overseas, or to slap across-the-board tariffs on Mexico until illegal immigration ceases to exist, or to write new provisions into the tax code that accidentally incentivize outsourcing, or emulate any of our president’s other ingenius approaches to reviving U.S. manufacturing.
Rather, the senator has put together a detailed plan for a new American industrial policy. You might not be familiar with that last two-word phrase; “industrial policy” fell out of fashion in the U.S. shortly after disco died. But the term describes an approach of policymaking that puts a premium on fostering globally competitive exporters in the industries of tomorrow, while protecting national champions in the industries of today.
In concrete terms, this often means making targeted federal research and development investments into emerging technologies, subsidizing job training for the sectors one wishes to expand, providing subsidized financing to exporters, and working to keep the value of one’s currency low enough to make your nation’s products affordable in foreign markets.
In practice, the U.S. has maintained a kind of industrial policy within its enormous defense industry. Market forces did not turn America into a leading exporter of airplanes and bombs, government policy did. But countries like Germany and China have maintained industrial policy across a wide range of industries in recent decades, while the U.S. has not. American policymakers effectively decided to accept high trade deficits in exchange for a strong dollar, which increased its citizens purchasing power (by making imports cheap) and buttressed America’s increasingly dominant financial sector.
But Warren thinks this was a bad deal. In her view, the immediate benefits that Americans derive from extra-cheap Chinese goods can’t compare to the long-term benefits to productivity, wages and growth that will come from turning America into a dominant exporter in the key technologies of the future — especially since those technologies largely concern climate change, and if someone doesn’t develop them, our great-grandchildren might perish in the end times.
“Over the next decade, the expected market for clean energy technology in emerging economies alone is $23 trillion,” Warren explains, inviting voters to think like venture capitalists. “America should dominate this new market. We have the creative researchers, the skilled workers, and the basic infrastructure to develop, manufacture, and export the technology the world needs to confront the existential threat of climate change.”
To that end, Warren proposes a variety of broadly pro-export policies, including:
• Creating a Department of Economic Development that would integrate the functions of the Commerce Department, Small Business Administration, “research and development programs, worker training programs, and export and trade authorities” into a single offices tasked with the sole objective of “creating and defending good American jobs.”
• Instructing the Federal Reserve and other relevent authorities to make monetary policy with an eye towards shrinking the trade deficit (in other words, to pursue a weak dollar policy).
• A lot more spending on federal research and development – and laws that ensure private firms that benefit from such R&D locate production in the U.S.
• Expanding the Export-Import Bank
• An enormous increase in funding for apprenticeship programs.
• Requiring the federal government to favor American producers in its procurement contracts to a greater degree that it does already.
Critically, Warren then weds this broad export-driven agenda to a sweeping plan for building up America’s climate-related industries. And this pairing makes great political and policy sense. By focusing her industrial policy on climate, Warren imbues her nationalistic economic agenda with a progressive, humanistic character. Dominating this field of technology will be good for Americans — and thus, potentially, exacerbate global inequality by concentrating income gains in one of the world’s wealthiest nations. But since we’re talking about products that would allow developing nations to industrialize — without rendering the Earth uninhabitable — Warren’s plan would also be good for humanity writ large. In fact, she specifically calls for a Green Marshall Plan, administered by a new federal office “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.”
Meanwhile, tucking her green energy agenda into a broader plan for revitalizing domestic manufacturing — and promoting economic patriotism — turns her climate policy into one of her platform’s most politically expedient planks. There is a reason that both parties call for a revival of American manufacturing every four years; voters long for such a development, particularly in Midwestern swing states. And who doesn’t want America’s corporations to show more loyalty to the communities that helped build them? Or to stop companies from taking the innovations our tax dollars bankrolled, and running? Warren’s plan even mandates that R&D investment must be “spread across every region of the country, not focused on only a few coastal cities,” making it not just populist, but prairie populist. What’s more some Republican senators have been warming to industrial policy recently. And policy wonks with the center-right Niskanen Center had kind words for Warren’s plan Tuesday.
Thus, economic patriotism makes Warren’s climate policy into a kind of bipartisan pander — while her “Green Apollo Mission” renders her plan for a manufacturing revival plausible and futuristic, instead of disingenuous and nostalgic.
Warren is selling (economic) Trumpism with a human heart, very good brain, and green thumb. Hopefully, voters will recognize it as an improvement on the original.
