SARAH MCCAMMON, HOST:
One of President Biden's biggest priorities in the White House was his ambitious and, some would say, controversial experiment to reshape the American economy with government subsidies and incentives. He invested hundreds of billions of dollars into certain industries - electric vehicles, semiconductors, batteries and infrastructure. Now, as Biden leaves office, NPR White House correspondent Asma Khalid has a look at this big bet to boost American manufacturing.
ASMA KHALID, BYLINE: This was a project unprecedented in modern times - a huge infusion of government spending to reshape the economy. It's part of something experts call industrial policy. Here's the president in the fall of 2023 in Pennsylvania.
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PRESIDENT JOE BIDEN: There used to be an argument that you can't have industrial policy dictated by the government. Well, guess what? I found that when you - when the government invests in the needs of the American people, invests in America and the American people, guess what? The private sector jumps on real quick.
KHALID: The idea of industrial policy had gone out of vogue in recent decades in Washington.
BRIAN DEESE: And while we did, the world changed.
KHALID: That's Brian Deese. He was a top economic adviser to Biden in his early White House days.
DEESE: And, in particular, the rise of China as a ascendant global economic power who plays by a different set of rules has come to the foreground.
KHALID: So the Biden team went to work, openly embracing industrial policy not just as an economic vision, but as a national security priority. They did this through a combination of carrots, like subsidies for clean energy, and sticks, like tariffs and export controls. And they made a lot of promises about the benefits. Inu Manak researches trade policy at the Council on Foreign Relations.
INU MANAK: And one of the challenges, I think, in Biden's industrial policy is that it was trying to do too many things at once - whether it was strategic competition, creating jobs for the future, fighting climate change or competing against China.
KHALID: And economists like Christine McDaniel were skeptical that any government spending of this size could work.
CHRISTINE MCDANIEL: Governments are not so great at picking winners and losers.
KHALID: McDaniel previously worked in government and is now with the Mercatus Center at George Mason University. It's a libertarian-leaning think tank. She doesn't see any sign that legislation, like the Inflation Reduction Act, is actually transforming the economy yet.
MCDANIEL: We have a whole bunch of history that shows us how difficult these types of industrial policies are to be effective. And so far, it doesn't look like the IRA is going to be any different. And so far, it doesn't look like the CHIPS Act is going to be any different.
KHALID: But Scott Paul with the Alliance for American Manufacturing says these are changes that could take years to be felt.
SCOTT PAUL: A manufacturing revival is not a four-year project. It's more like a 40-year project.
KHALID: And it's not clear yet what the incoming administration intends to do. Many of the projects that have been announced are in Republican-controlled districts. Here's Scott Paul again.
PAUL: Politicians like nothing better than going to a factory opening or a ribbon cutting. And so I don't think that Trump or any of the Republicans are going to want their legacy to be a bunch of, like, half-built factories.
KHALID: The Biden administration has been rushing to get funding out the door, but tens of billions of dollars from these programs have yet to be invested. During the presidential campaign, Trump specifically took aim at clean energy incentives and semiconductor subsidies.
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DONALD TRUMP: That chip deal is so bad.
KHALID: Here he was on Joe Rogan's podcast.
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TRUMP: You didn't have to put up 10 cents. You could have done it with a series of tariffs. In other words, you tariff it so high that they will come and build their chip companies for nothing.
KHALID: That CHIPS Act passed with both Republican and Democratic support, and the private sector has stepped up, too. All told, the White House says there's been more than $1 trillion of private money poured into clean energy and manufacturing projects. The president hopes that once it all takes root, it'll be hard to reverse. He talked about his legacy on the Pitchfork Economics podcast.
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BIDEN: I think we've announced, I don't know, thousands of projects around the country for infrastructure and the CHIPS Act, but guess what? The fact is, takes time to get them up and running.
KHALID: Whether these investments actually pay off may be up for debate years after Biden leaves the White House. But one lasting legacy is that maybe the idea of industrial policy itself is no longer as taboo in Washington as it once was. Asma Khalid, NPR News. Transcript provided by NPR, Copyright NPR.
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