[JumpCrisscross]

The playbook to study is South Korea. Protectionism and subsidies for nascent and transitioning industries with a clear ex ante timeline to full liberalization to force international competitiveness. Absent the latter, American car companies’ inefficiencies in design and labour structure have zero incentive to change, and American consumers get stuck with shitty, expensive products.

For cars, this would mean federally-guaranteed loans up to the median value of a plant for any manufacturer with any production base worldwide (the plant to be built or retrofitted in America, of course) plus an N-year (N set to the expected payback period for a new or retrofitted plant) tariff schedule starting very high before decreasing to virtually zero. Maybe also pass a special bankruptcy regime to expedite the redistribution of assets for those who fail to really send the message that failure is an option.

[BrenBarn]

I feel like the "clear ex ante timeline" is a big problem for us in the US. A prominent feature of US politics (and indeed culture) is constantly setting such targets and then chickening out and moving the target back as the time approaches. That in turn creates a sort of moral hazard where no one feels an urgency to meet deadlines because they know they'll be loosened up later.

[JumpCrisscross]

Hmm, maybe a carrot with liberalization? Tax benefits to the car companies come to mind. But I’m almost more of a fan of creating a monetary incentive for the lenders with the federal guarantees—if the liberalization gets delayed or derailed, they lose money.