"Industrial policy" is the polite term. Trumpian "bullying" is more accurate. The Carrier deal agreed to last week is a case in point -- and just the beginning. It would be much better to separate politics from economics. Here are the big four reasons why:
1. No third party is equipped to second-guess any business decision.
2. Third parties are easily involved in political grandstanding. This makes them worse than ill-quipped to intervene.
3. Politicians inevitably over-promise. Delivering is the hard part. The Obama forces may still be puzzling over Democrats' thrashing last week. But it's very simple. "Hope and Change" set expectations much too high.
4. Over-promising also leads to restiveness that invites despotism and repression. Venezuela, Cuba, North Korea and many others are in this state. This is where it gets really ugly.
These are well known non-trivial dangers. The unseen (Bastiat) is always the problem.
Trouble is that both political parties love this stuff. Particularly awful us how the normally sober Peggy Noonan (WSJ) and Mark Shields (PBS NewsHour) also cheer. This is not about elites vs non-elites. One more cliche just died.
ADDED
Dan Griswold reminds us of the danger of "blowback" retaliation from abroad. Yes, the hole being dug can get pretty deep.
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A blog exploring the intersection of economic thinking and urban planning/real estate development and related big-think themes.
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