[ralegh]

Why not? Are economists infallible? Even if there’s many of them they may have been taught the same material and risk groupthink.

What position is the US in if all their goods are manufactured abroad? What if the dollar stops being respected?

[stetrain]

Yeah, optimizing for economic output isn't the only factor to consider. Having some degree of geopolitical independence and leverage matters when things go off of the happy path for whatever reason.

[resters]

What does "geopolitical independence" mean? The ability to disregard international law? The ability to make war without worrying about the target being a trading partner?

[stetrain]

To me it means some degree of being able to continue with necessary production despite global disruptions due to political disagreement, war, disaster, etc.

For example, a major push to bring more semiconductor production to the US was motivated by supply shortages during the COVID pandemic.

A globally interconnected and inter-tangled trade economy has a lot of benefits, but it can also be disrupted. So some degree of resilience against this kind of disruption may be beneficial.

[resters]

The pandemic was part of it, but a lot of the shortages were related to the trade war started by Trump and the failure of the US collaborate with public health authorities in China to stop the pandemic sooner.

From the perspective of Trump, those shortages were a good thing because they forced US firms to find other inputs and to resent China and feel suspicious of relationships they had depended on for years.

A friend of mine whose company ultimately failed due to the tariff-induced shortages watched his 90% US-based manufacturing business go under after it couldn't keep up with lower-cost Chinese-manufactured goods -- Chinese manufacturers got all the parts cheaper with no tariffs so their resulting BOM cost was a lot lower. All because he did most of it in the US and relied upon a small number of Chinese manufactured parts.

Lesson learned. Now he isn't even in business anymore so there are fewer voices to complain about the tariffs.

[resters]

Empirical studies show that governments typically do not introduce policies that result in benefits overall, and the costs of those polices are typically higher than if everyone had just paid a tax that was given as welfare to the small number of workers in the effected industry.

What position is a homeowner in when they decide to hire someone else to mow their lawn? Economic specialization generally a good thing.

US politicians get enamored by industrial policy when they see what happened to the "asian tiger" economies over the past decades. They forget that those nations were so destroyed by war that the "growth" was less due to the policies than to the people's motivation to live in a free and peaceful society.

China is also now the poster child for industrial policy. China had many years of intentional economic suppression in the name of societal harmony (preventing chaos resulting from some regions being poor and isolated and others being rich). In recent years China has managed to use some of the wealth to undertake a social policy (plus industrial policy) of bringing wealth from the coastal manufacturing regions into the agricultural regions, training workers, etc.

Even in spite of all this, China's GDP is still significantly lower than it would be without all the policies, but the societal order is preserved and there is likely greater social stability.

China faces unique challenges in these areas relative to other countries (largely due to geography) which is why it had suppressed its economy so much for so long.

We are getting a glimpse at what a modern approach to Chinese capitalism will look like and it has already left the US in the dust in terms of productivity. It's ironic that the US mis-attributes the success to the industrial policy rather than to the repeal of it.