The GOP’s Boardroom Problem
This essay is part of The Right Way Forward, Restoring America's new think tank debate series in which leading conservative institutions argue the defining questions of the post-Trump era. Read about the series here.
TL;DR
- Republicans historically warned against Democrats wanting the federal government to run the economy, associating it with socialism.
- The Trump administration's economic nationalism involves direct federal government intervention in corporations, going beyond previous industrial policy schemes.
- While addressing issues like competition with China and supply chain resilience is important, heavy-handed government intervention is not the solution.
- The Biden administration used subsidies and tax credits for industrial policy, which many Republicans criticized.
- The Trump administration has expanded on this by taking ad hoc ownership in companies, raising concerns about political favoritism and lack of transparency.
- Federal ownership of companies makes regulatory and other government decisions suspect, potentially protecting investments rather than enforcing neutral rules.
- This approach undermines the credibility of conservatives to critique government intervention and the principles of free enterprise.
- Markets discipline error while politics rewards influence; federal ownership of companies erodes this market discipline.