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Joey Politano🏳️‍🌈

@josephpolitano.bsky.social

Writing a data-driven newsletter about economics @ apricitas.io Nuance? In this Economy he/him | bi/pan

7.1k followers217 following1.4k posts

JPjosephpolitano.bsky.socialOct 7, 2024 9:47pm

The regional dynamics of America's industrial policy are building support for decarbonization—but it still remains to be seen if they can build successful & durable manufacturing industries. If they do, they will forever reshape US economic geography

screenshot of text that reads "I often return to Robinson Meyer’s piece on the underlying logic of the Inflation Reduction Act and this administration’s other clean energy policies—policymakers’ long-run goal was not purely to decarbonize the US, but rather to create a durable American political coalition for decarbonization. Efficient solutions like outright taxing or regulating carbon emissions were considered not politically viable, so instead the decarbonization push had to come in the form of heavy subsidies for clean power production, a tariff-protected EV industry, funding for home energy efficiency upgrades, and much, much more.

Those projects would then give Texas ranchers, Michigan autoworkers, and Pennsylvania homebuilders concrete benefits attached to the clean energy buildout and thus fold them into an electoral coalition that could defend or expand the IRA. There’s some evidence this strategy is already working—no Republican voted for the Inflation Reduction Act when it.

A similar process could happen to semiconductor manufacturing and other industries considered key to growth and national security. The tremendous electoral power of US auto manufacturing comes in large part from the sector’s concentration in midwestern swing states—diversifying chip manufacturing employment from historical hub states like Oregon and California to more swing states like Arizona and Ohio could likewise provide it with similar political defenses.

Of course, there is still a tremendous danger that a politically defended industry can grow into a leech rather than a butterfly—for all the effort that’s gone into shielding the auto industry, Americans do not have a much more efficient or internationally competitive vehicle manufacturing sector than they did 20 years ago. Indeed, the investment boom of the last few years has not yet cured America of its endemic manufacturing productivity problem, and the recent performance of key players like Intel does not inspire confidence.

JPjosephpolitano.bsky.socialOct 7, 2024 9:47pm

Thanks for making it to the end of this thread! Here's a link to the full article where I go into much more detail if you want to keep reading, and while you're there consider subscribing to my newsletter where I write all about economic data! www.apricitas.io/p/the-region...

The Regional Impacts of America's Investment Boom

A Detailed Look at How Investments in Clean Energy, Semiconductors, & Infrastructure are Reshaping American Economic Geography

Joey Politano🏳️‍🌈

@josephpolitano.bsky.social

Writing a data-driven newsletter about economics @ apricitas.io Nuance? In this Economy he/him | bi/pan

7.1k followers217 following1.4k posts