Time for a Federal Industrial Policy

Article excerpt

President Obama needs to go further than criticizing millionaires and oil companies. He needs to propose an industrial policy.

In his June 29 news conference, Obama was right to come out against tax breaks for millionaires and billionaires, corporate jet owners and oil and gas companies. What is passing as the free market these days is a system of giveaways to those who don't need it -- the wealthiest Americans, corporations that relocate jobs overseas and banks that are "too big to fail," yet have failed the economy with their predatory practices.

With more than 10 million jobs lost to the recession -- and the private sector sitting on cash -- it is clear that the United States is on the wrong course, a course that won't be corrected with more tax cuts and deregulation. America needs a plan. And it must generate growth by selling and exporting things people will buy rather than through credit-fueled consumption and a reliance on fossil fuels.

This is where industrial policy comes in.

Industrial policy is when a government fosters the development of certain industries or sectors -- through loans, subsidies or other support mechanisms.

The main idea is that organized and coordinated government intervention -- particularly in collaboration with the private sector -- can bring sustained growth that benefits the whole society.

Industrial policy is nothing new. For example, President Franklin D. Roosevelt's New Deal allowed the nation to recover from a crippling Great Depression.

More recently, U. …