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The Economy

Industrial Policy: Winner after Winner

Electric vehicle chargers from Electrify America at a shopping center parking lot in Oceanside, Calif., October 19, 2023. (Mike Blake/Reuters)

Back in November, Dominic Pino asked an intriguing question:

How long does it take the federal government to build one electric-vehicle charger?

The answer?

Longer than two years, apparently.

The $7.5 billion in funding for electric-vehicle chargers from the 2021 bipartisan infrastructure law has so far yielded zero new chargers, according to Politico. “Odds are they will not be able to start powering Americans’ vehicles until at least 2024,” the story says.

To be fair, the pace has picked up.

Autoweek, May 7, 2024:

The Biden Administration’s $7.5 billion effort to jump-start the electric-vehicle charging landscape is moving very, very slowly. Now more than two years after the program was signed into law in late 2021, only eight chargers have been put in place.

Meanwhile, Reason reports that:

One of President Joe Biden’s pledges upon entering office in 2021 was to expand Americans’ access to high-speed broadband internet. But despite apportioning tens of billions of dollars to the task, not one person has been connected to the internet as a result of the initiative.

Contained within the 2021 infrastructure bill, the Broadband Equity Access and Deployment (BEAD) program authorized more than $42 billion in grants, to “connect everyone in America to reliable, affordable high-speed internet by the end of the decade.”

Reason‘s comment was prompted by a series of tweets by Brendan Carr, a (Republican) FCC commissioner. Here’s how it began:

In 2021, @VP Harris agreed to lead the Administration’s signature effort to expand Internet infrastructure. Congress then provided $42 billion for the work.

As at the date of his tweets, observed Carr, no Americans had been connected and no “shovels worth of dirt turned.”

Par for the Pino course.

But, tweeted Carr, the story gets worse:

In 2020, [SpaceX’s] Starlink won an FCC award to quickly & efficiently offer Internet to 642,000 homes & businesses. But the FCC revoked that award in 2023. The revocation hit states like Pennsylvania particularly hard b/c it had 59,200 locations covered by the award. The 2023 Commission decision to revoke the Starlink award only came after the Administration gave agencies the green light to go over Musk. The government’s approach to broadband infrastructure should be guided by smart policies not partisan score settling.

Improving broadband access is, undoubtedly, an aspect of industrial policy. As Heather Boushey, a member of President Biden’s Council of Economic Advisers and the Chief Economist for the Invest in America Cabinet at the White House, referring to another piece of legislation, noted in 2024:

Access to internet is now a must-have for creating and running businesses in the U.S. economy. Businesses engage with customers, suppliers, and services (such as banking and accounting) online; online sales account for 15.9 percent of total retail sales, nearly nine percent more than a year ago; and most job seekers now look for jobs online. Several recent papers have found causal links between expansions of broadband (high-speed internet) access and the creation of new businesses, as well as the growth of existing businesses, in urban and near-urban areas. The literature indicates that rural broadband expansion also likely affects business growth and formation, particularly in knowledge-intensive industries.

Perhaps the revocation of the Starlink award had nothing to do with Musk’s purchase of Twitter in 2022 (and what followed). Perhaps. But if it had done, it would not be a surprise. All too often, part of the (unstated) purpose of industrial policy is the power it gives to politicians or bureaucrats to dispense favors, to punish behavior of which they disapprove, and to promote an ideological or political agenda on top of that which the policy is supposed to achieve, an agenda which, under certain circumstances can even work against the policy’s (stated) objectives.

Carr:

There’s still time to correct course & start connecting communities. Begin by eliminating the DEI mandates, dropping the climate change agenda, reversing the unlawful technology bias, and cutting out the layers of needless red tape added on by the Biden-Harris Administration.

Fortunately, as Reason observes, “the private sector is expanding access to broadband on its own.”

Amazing!

And, in another piece of industrial policy news, there’s this from the Wall Street Journal yesterday:

Almost every day we get a White House press release touting jobs created by its political handouts. Where’s the memo this week about the looming job cuts at Intel and Stellantis, two beneficiaries of this corporate welfare? Both were supposed to be industrial policy winners.

Amazing. Not.

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