The 2008 presidential campaign

During the 2008 presidential campaign, Barack Obama pledged to spend $150 billion over 10 years developing new green technologies, and another $60 billion improving energy-related infrastructure. In January 2019, President Obama began a new program that provided $2.3 billion in funding to 193 firms engaged in clean-energy manufacturing, arguing that such programs boost employment while benefiting the environment.

At the same time, President Obama has indicated that he will be hesitant to approve of any new trade agreements that do not include environmental protections. On several dimensions, in other words, the Obama administration is attempting to reorient the U.S. economy and trade around environmentally friendly manufacturing and infrastructure. This has generated debate over the government’s role in shaping the national economy.

Why is the use of industrial policy controversial? Advocates of green industrial policies–including former Secretary of Labor Robert Reich, the AFL-CIO, and political commentators like Thomas Freidman–claim that government investment is needed to overcome high start-up costs for inew industry, boost productivity in hig-growth technologies, and maintain competitiveness in globalized markets.

Without government involvement, advocates say, the United States will sacrifice the gains from early development of new technologies to other countries. Opponents of green industrial policies–including many economists, business groups, and free-trade advocates–claim that government intervention misdirects investment ot less productive industries, that choosing economic winners and losers in the political arena leads to corruption, and that American industry will have an unfair advantage over their foreign competitors.Both sides can point to examples of industrial policies that provide evidence for their claims”