Home / General / Gee, I Wonder if the Nation Needs an Industrial Policy

Gee, I Wonder if the Nation Needs an Industrial Policy


I’m going to make the bold statement that maybe outsourcing almost all production of key goods to a few nations in Asia has its downside:

The global semiconductor shortage that has paralyzed automakers for nearly a year shows signs of worsening, as new coronavirus infections halt chip assembly lines in Southeast Asia, forcing more car companies and electronics manufacturers to suspend production.

A wave of delta-variant cases in Malaysia, Vietnam and the Philippines is causing production delays at factories that cut and package semiconductors, creating new bottlenecks on top of those caused by soaring demand for chips.

Underscoring that the problem has defied easy solutions, the White House on Thursday held its second summit in five months with semiconductor manufacturers and buyers, in part to gain more clarity on the scope of the crisis, senior administration officials said.

Attendees included senior executives from Intel, General Motors, Ford, Apple, Microsoft, Samsung and two dozen other companies, as well as Commerce Secretary Gina Raimondo and National Economic Council Director Brian Deese.

Frustration has mounted on all sides. Automakers want semiconductor companies to crank out more chips for cars. Smartphone companies do not want their semiconductors diverted to automakers. Chip manufacturers say the auto industry shot itself in the foot by canceling semiconductor orders after the covid crisis hit. They are also impatient for Congress to approve $52 billion in federal subsidies to boost domestic semiconductor manufacturing. That measure, supported by the White House, has cleared the Senate but not the House.

Most certainly, we do need to produce a lot of semiconductors in the United States, which would benefit everyone but extremely rich people who would prefer to pay workers in Asia pennies on the dollar. Of course, a lot of semiconductors should and will remain being produced in Asia. What a real industrial policy requires in a globalized world is a variety of nations producing goods in order to forestall potential disasters like this. It’s not about nationalism. It is about avoiding the kind of greed and technological fetishism that can create something like just-in-time manufacturing and assume that there won’t be the inevitable problems that anyone with half of brain but hasn’t drank the kool-aid can easily see.

  • Facebook
  • Twitter
  • Google+
  • Linkedin
  • Pinterest
It is main inner container footer text