{"id":10663,"date":"2023-05-11T15:53:59","date_gmt":"2023-05-11T15:53:59","guid":{"rendered":"http:\/\/lonecandle.com\/?p=10663"},"modified":"2023-05-11T15:53:59","modified_gmt":"2023-05-11T15:53:59","slug":"the-origins-of-bidens-most-important-policy-explained","status":"publish","type":"post","link":"https:\/\/lonecandle.com\/?p=10663","title":{"rendered":"The origins of Biden\u2019s most important policy, explained"},"content":{"rendered":"\n<p>\n\n&#8220;At its heart, industrial policy strives to solve a \u201cclassic Keynesian political problem,\u201d says economic historian Yakov Feygin, director of the Berggruen Institute\u2019s Future of Capitalism program: The only way to grow the economy is ultimately through productivity-enhancing investment \u2014 but there are enormous upfront costs to building new plants or buying new equipment, especially at the technological bleeding edge, while returns are years in the future if they ever come at all.<\/p>\n\n\n\n<p>If only capitalists get to decide when to invest, they may \u2014 rightfully \u2014 decide that the unpredictability of future demand and credit conditions make it difficult to justify expanding capacity in crucial sectors even in the face of soaring prices. They fear the \u201c<a href=\"https:\/\/www.sciencedirect.com\/topics\/economics-econometrics-and-finance\/bullwhip-effect\" target=\"_blank\" rel=\"noreferrer noopener\">bullwhip effect<\/a>,\u201d where investors may put up cash for new plants or equipment to respond to higher prices, only for those prices to fall before new production can actually come online.&#8221;<\/p>\n\n\n\n<p>&#8230;<\/p>\n\n\n\n<p>&#8220;The government, for better or worse, has the unique ability to stabilize the investment cycle and goad risk-averse private capital into making desperately needed, but enormously costly, long-term investments.&#8221;<\/p>\n\n\n\n<p>&#8230;<\/p>\n\n\n\n<p>&#8220;Biden\u2019s economic team is betting on something Hamilton knew: Long-term investment in the real economy is essential, but private investors might not provide it. That\u2019s where government can \u2014 and should \u2014 step in.&#8221;<\/p>\n\n\n\n<p><a href=\"https:\/\/www.vox.com\/policy\/2023\/4\/5\/23668755\/industrial-policy-biden-chips\">https:\/\/www.vox.com\/policy\/2023\/4\/5\/23668755\/industrial-policy-biden-chips<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;At its heart, industrial policy strives to solve a \u201cclassic Keynesian political problem,\u201d says economic historian Yakov Feygin, director of the Berggruen Institute\u2019s Future of Capitalism program: The only way to grow the economy is ultimately through productivity-enhancing investment \u2014 but there are enormous upfront costs to building new plants or buying new equipment, especially at the technological bleeding edge, while returns are years in the future if they ever come at all.<br \/>\nIf only capitalists get to decide when to invest, they may \u2014 rightfully \u2014 decide that the unpredictability of future demand and credit conditions make it difficult to justify expanding capacity in crucial sectors even in the face of soaring prices. They fear the \u201cbullwhip effect,\u201d where investors may put up cash for new plants or equipment to respond to higher prices, only for those prices to fall before new production can actually come online.&#8221;<\/p>\n<p>&#8230;<\/p>\n<p>&#8220;The government, for better or worse, has the unique ability to stabilize the investment cycle and goad risk-averse private capital into making desperately needed, but enormously costly, long-term investments.&#8221;<\/p>\n<p>&#8230;<\/p>\n<p>&#8220;Biden\u2019s economic team is betting on something Hamilton knew: Long-term investment in the real economy is essential, but private investors might not provide it. That\u2019s where government can \u2014 and should \u2014 step in.&#8221;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[13],"tags":[1349,217,1469,1875,797,780,411],"class_list":["post-10663","post","type-post","status-publish","format-standard","hentry","category-article-share","tag-economic-growth","tag-economics","tag-government-intervention","tag-industrial-policy","tag-industry","tag-joe-biden","tag-policy"],"_links":{"self":[{"href":"https:\/\/lonecandle.com\/index.php?rest_route=\/wp\/v2\/posts\/10663","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lonecandle.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lonecandle.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lonecandle.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/lonecandle.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=10663"}],"version-history":[{"count":1,"href":"https:\/\/lonecandle.com\/index.php?rest_route=\/wp\/v2\/posts\/10663\/revisions"}],"predecessor-version":[{"id":10664,"href":"https:\/\/lonecandle.com\/index.php?rest_route=\/wp\/v2\/posts\/10663\/revisions\/10664"}],"wp:attachment":[{"href":"https:\/\/lonecandle.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=10663"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lonecandle.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=10663"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lonecandle.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=10663"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}