Susan Helper: “Industrial Strategy: Theory And Practice”

Recorded on April 19, this video features a talk by Susan Helper, Carlton Professor of Economics at Case Western Reserve University and former Senior Advisor for Industrial Strategy in the Biden Administration. Professor Helper reflects on her experience designing and implementing strategies for supply chains such as electric vehicles, personal protective equipment, and clean energy. She also discusses the role of academic theory in these efforts, and provides suggestions for future academic work.

“Why is industrial strategy useful?” Helper said. “I’m an economist, so this is basically heavily based on the idea that there are spillovers. Private actors don’t capture all the benefits and costs of their actions, and some effects spill over to affect others. And so then, in that case, there’s a role for government to step in and help with some of these issues….. And industry-specific actions — this is more controversial among economists, but changing — are useful when there are particular bottlenecks or particular places where you need to address supply and demand at the same time.”

Sarah DiMagno moderated the panel, and Daniel Aldana Cohen and Ari Benkler served as discussants.

Co-sponsored with the Berkeley Roundtable on the International Economy (BRIE).

About the Speaker

Susan Helper
Susan Helper

Susan Helper is the Frank Tracy Carlton Professor of Economics at the Weatherhead School of Management at Case Western Reserve University. She was formerly Chief Economist at the U.S. Department of Commerce and a member of the White House Staff. She has served as chair of the Economics Department, and has been a visiting scholar at University of Oxford, the University of California (Berkeley), Harvard University and the Massachusetts Institute of Technology (MIT). Her research focuses on the globalization of supply chains, and on how U.S. manufacturing might be revitalized. Dr. Helper received her PhD in Economics from Harvard and her BA from Oberlin College in Economics, Government and Spanish.



[STEVEN VOGEL] Hello, everyone. I’m Steve Vogel. I am a member of the steering committee here at the Berkeley Economy and Society Initiative. I would like, first of all, to thank our co-hosts, the Social Science Matrix, and also our co-sponsor, the Berkeley Roundtable on the International Economy.

I want to mention two events coming up from BESI. You can see them on your screen. April 23, Public Investment for Climate and Social Goals and Agenda for Brazil and Latin America. And April 30, the National Investment Authority, an institutional blueprint and implications for climate policy.

I’m just going to very briefly introduce our moderator, Sarah DiMagno, and let her take it from here. Sarah is a doctoral student in jurisprudence and social policy program. She’s also a student at Berkeley Law. She’s also in the PhD minor, or designated emphasis in political economy. And she’s in the workshop on industrial policy. Thank you so much, Sarah.


[SARAH DIMAGNO] OK, thank you so much for having me, Steve, and to BESI and the Berkeley roundtable on international economy. So I’m very excited to moderate this conversation. I’ll just briefly introduce our speaker and our two commentators today, and then I’ll turn it over to Professor Helper for her remarks. And she’ll take questions during her presentation if anything is unclear. And then our two commentators will provide their remarks. When they’re finished, we’ll do Q&A. And I’ll just keep the queue. So if you would like to ask a question, just catch my eye, and I’ll make sure to get to you.

So beginning with our guest today, Sue Helper, she’s the Frank Tracy Carlton Professor of Economics at the Weatherhead School of Management at Case Western Reserve. She was formerly the Chief Economist at the US Department of Commerce, a Senior Economist at the Council of Economic Advisors, and most recently, the Senior Advisor for Industrial Strategy at the White House Office of Management and Budget. And her research focuses on the globalization of supply chains and how US manufacturing might be revitalized.

Our first commentator today is Ari Benkler, who is a first-year PhD student in the political science department. He focuses on the political economy of climate change and its intersection with economic inequality and democratic instability. He studies how institutional arrangements, interest groups, and legal rules can produce variation in environmental law and policy. And he is currently working on a project on energy federalism and the impacts of the IRA on state politics and policy-making.

And finally, our second commentator today is Daniel Aldana Cohen, who is an assistant professor of sociology here at UC Berkeley, where he’s also the director of the Sociospatial Climate Collaborative. Professor Cohen works on the intersections of the climate emergency, housing, political economy, social movements, and inequalities of race and class in the United States and Brazil. And he’s currently completing a book project called Street Fight Climate Change and Inequality in the 21st Century City. So without further ado, I’ll turn it over to Professor Halper. Thank you so much for being here.

[SUSAN HELPER] Great. Cool. So I can’t express how excited I am to be here and just get this opportunity to talk to you all about this and just the incredible audience that we have today of the father of a lot of these issues. So John Zysman, who the manufacturing matters is, as relevant today as it was written when it was written. And it’s extremely exciting, not just to have read the book and discuss it with John.

But also to have something to do– be able to do something about the problems that are laid out there. That for decades, the problem just got worse of US manufacturing, US industrial leadership, climate change, all that stuff. And now, in part, following in the great footsteps of Kate Gordon, able to just work on this and build things, and then leaving, hopefully, behind for Anna Waldman Brown, who’s continuing to work in OMB, and hopefully some of you all that will continue to do this stuff, whether it’s in the US or Finland, or wherever.

So my goals then are really to talk about the how of industrial strategy rather than the why, and focus on particularly the role of academic research in designing and implementing industrial strategy, and promote discussion of these topics. And happy to have discussion during the talk if that’s useful.

So the outline, I first want to spend a minute defining what I mean by industrial strategy and talk about really briefly about the goals of the Biden strategy and the outcomes so far. And then talk about just four issues of industrial strategy, this implementation. This is a subset, but one is promoting synergy across goals and managing conflict among them. So the everything bagel, liberalism discussion, addressing coordination failures, designing good jobs.

I will talk about supply chain resilience and then also finally, sort of, building self-reinforcing progress. How do we make sure that this is not one-and-done, but puts the US on a different and better path? And then, finally, we close some topics, some thoughts about academic research.

So, to me, industrial strategy refers to government efforts to transform the economy, including through policies designed to affect particular industries. And so I think the verbs here are really important. So transform the economy, so it’s not just any tariff policy, but it’s tariffs that are designed to transform, ideally with complementary policies that build. And then, designed to affect particular industries, and the US has long had policies that affect industries, but not necessarily in a designed or coherent manner.

Why is industrial strategy useful? So just a very quick discussion about why. And I’m an economist, so this is basically heavily based on the idea that there are spillovers, private actors don’t capture all the benefits and costs of their actions, and some effects spill over to affect others. And so then, in that case, there’s a role for government to step in and help with some of these issues.

And industry-specific actions, this is more controversial among economists but changing, are useful when there are particular bottlenecks or particular places where you need to address supply and demand at the same time. And I’ll give some examples. So even if it was politically feasible in the US to have a carbon tax, I’d argue that we want some of these industry-specific policies.

Where is this useful? So most of the examples in this talk are going to be drawn from manufacturing because that’s what I work on, but we’ve had a long history of industrial policy in the US, on agriculture, on medical and health-care, continuing or developing industrial policies around AI and quantum. And then there’s, I think, very important interaction between manufacturing and services that we’ll discuss.

So I want to talk just a little bit with some, I guess, propaganda fresh off the boat, White House propaganda from Heather Bouchey at CEA. And so, then, just what is Bidenomics. So the goals are to lay the foundation for strong, sustainable, and equitable growth. So these are three goals that are not always– anyway, I will talk about the relationship among these goals.

And so implementing the policy, there’s been four big bills, the American Rescue Plan, Bipartisan Infrastructure Law, CHIPS and Science Act, Inflation Reduction Act, sometimes similarly known as the Three Uncles, BIL, CHIPS, and IRA, and then ARP, I guess. So what is Bidenomics? Three phases, investing in America, empowering and educating workers, and then shaping markets to be fair and resilient. This is different and much less passive than the traditional economist’s view that the government responds to market failures. We want to proactively shape. And I’ll give some examples.

And so what’s impact, so far? We have seen doubled investment in manufacturing construction, kind of the best-leading indicator that you might think of since these bills were signed. It’s too early to think about tons of jobs, tons of output, but we’re seeing, as a leading indicator, already a whole bunch of investment.

There are some arguments that in favor of the idea that we are crowding in private investment. So there’s about $500 billion in public investment that’s been disbursed so far in infrastructure and clean energy. And this is spread across the country. And that’s led to more than a one-for-one increase in private sector investment. So almost $700 billion. And we can come back to these if you want.

The overall modus operandi of the Biden administration is somewhat different than maybe textbook industrial policy or than that has been tried in the past. The idea is that government should be a partner and not a rival to business, and that it’s possible to crowd in private investment. So the neoclassical economic assumption is essentially there’s a kind of a fixed pool of investment. And if the government does $1 more, then the private sector will do $1 less, and that that’s bad because the government lacks both the information and the incentives to do it well.

And in contrast this view is, the government can actually unlock private investment by overcoming coordination failures and aligning public and private incentives. And I’ll give some examples of that. There’s little direct government ownership. So, for example, we are subsidizing the private construction of electric vehicle chargers, we’re not owning them directly. And this is in contrast, say, to the Tennessee Valley Authority of the Roosevelt era. There are, in fact, a few sticks. There’s strengthened Made in America rules, there’s environmental regulations, there’s tariffs.

So one question actually my students asked me, why should Berkeley support aid to dying Midwest industries? And so, I think there are several answers to this question. One is self-interest. It promotes linkages that enhance software jobs. There are potentially a lot of applications of artificial intelligence and machine learning in manufacturing. And proximity promotes discussion of what data to capture, what hypotheses to test.

An example of this, you may think, well, gees, you can have sensors everywhere. Why can’t data scientists in Berkeley tell those stupid people in Cleveland how to run their factory? So there is a highly automated Rockwell Automation factory south of Cleveland that makes printed circuit boards, and they had, a couple of years ago, this mysterious quality problem that happened only in Cleveland, only in January, across all their product lines. And they couldn’t figure it out.

And it turned out they actually asked the workers. Workers said, well, it’s dry in here in January. And whenever it’s dry, we have a lot of quality problems. And so, sure enough, they looked. And they went and collected data on humidity. They had not thought it necessary to have data on humidity. That wasn’t part of their model. They installed misters, and that problem went away.

So now they collect data on humidity. They didn’t think to do it before. So that’s a sort of human-generative thing is to think about new ideas here. And so then, knowledge of the manufacturing process, and not just the software, is really helpful. So that’s the first example is self-interest.

Second one is productivity. If you correctly measure productivity, US manufacturing, we do a lot better than it currently is. A lot of the competition that we face is based on exploitation of labor and the environment. And we aren’t pricing the risk of lack of supply chain resilience, for example.

And then, finally, politics. If we actually care about the next set of climate actions, you’ve got to keep this coalition together. And people have to see themselves in the future. So I don’t know if I convinced anybody. It’s not an idea. Somewhat self-selected audience, I guess, but– [LAUGHS]

So if we have these linkages, they exist, how do we maximize their potential? So one argument I want to make is you don’t want to just have linkages, you want to think about how things work together, bring in the idea of incentives, and broadly constructed. And so, in a couple of ways, so I mentioned, I guess, the issues I want to talk about. And so, then the first one is synergy across goals and managing conflict among them.

And so, in fact, it sometimes happens that goals are synergistic. So there’s a climate, labor, DEI alliance that people like Kate really did a lot to lay out how this works. And then there’s a kind of functional argument that domestic production and high wages can promote innovation, can also promote resilience. So these things are not necessarily in conflict.

Sometimes they actually are conflict. And early in the administration, we had a bunch of, I might say, sort of theoretical and not super productive discussions about which was more important. And eventually, we started to actually let’s do some analysis and see what this looks like in a particular case. And so, I want to talk about that a little bit in the specific case of electric vehicle charging, where I argue I think we actually shaped markets.

So the bipartisan infrastructure law allocated $7.5 billion to EV charging. And that’s– a reason for that is it’s a compliment to adopting electric vehicles. There’s analysis that argues that spending $1 on EV charging has this similar impact of spending $12 on direct subsidies to consumers for buying vehicles because it addresses the range anxiety issue.

So it’s a kind of an example of something, if you want fast action to offset climate change, a carbon tax probably isn’t alone what you need, you want some direct action. Let’s look at– overcome this kind of chicken and egg problem, where there are no chargers because it’s not profitable because there aren’t any EVs, but nobody wants to buy an EV if there’s no charger. So let’s jumpstart the issue.

So initially, there weren’t any US manufacturers of fast chargers. And so you could, oh, OK, we’ll just wave all the Buy America laws. And that would have been very easy, because the Federal Highway Administration has a blanket waiver dating back to the 1980s for everything on highways. So we forged ahead in the Made in America office and did some analysis. So I spent some quality time interviewing and calling up, under great pressure, all these charger manufacturers. So one of the things we realized is that there’s a lot of time required for planning and permitting. And we can think about these are problems we need to solve. But in this case, we had at least two years between the time this law was passed and the time the chargers would actually be needed to be placed in the ground.

So we called up a bunch of manufacturers and asked them, well, what is your plan? And so we kind of cajoled and incentivized. So carrots and sticks. What are you going to do? What can you do? What can we realistically get in terms of a US manufacturing industry in two years?

And so there’s two parts to the Buy America laws. First is that it has to be assembled in the US. It turned out that, as this says, that there were 11 firms, including four that were already beginning US production, that said that they could assemble in the US a bunch of chargers. Charging, it’s actually not that complicated to assemble an EV charger. You could do it in this– a room about this size.

The second piece of the Made in America laws are a little more complicated, that you have to have 55% of the value of your components made in the US. And given that a lot of that is chips and things that we don’t yet make, there’s also cables and other kinds of things, that’s going to take a little bit longer. But we showed that the companies were pretty confident that they could get there by this year.

And so then, what the waiver that we ended up with was immediately you must assemble any chargers that are going to be paid for with public money, you have to assemble those in the US. And then, after July of 2024, you also have to meet this 55% component requirement. But it was based on analysis, and so we kind of resolved this contradiction by getting in the weeds, thinking about supply and demand together, all kinds of stuff. Very exciting. And so now we created this industry that didn’t exist before.

OK, so other steps to take when goals are in conflict. So create policy processes to work things out. Initially, everybody was in their silos. It was kind of a disaster. And there’s at least some effort now to have these big bills each have their own coordinating offices. And I’m happy to say more about that. And Kate probably understands it better.

Then you can also enhance conditionality to get both. And this is one of the things, particularly DOE, has really advanced what can we do. The first point that I want to make is that there’s two pieces of the coalition that are seen kind of as similar, but they’re actually slightly different goals. So one is promoting unions, and the other is promoting inclusion and diversity.

And initially, I think some of the community benefit plans, so an innovation from labor from– excuse me, from DOE, was to require community benefit plans in grant proposals. And these initially had a bunch of points really that promoted at least some nods, not totally effective, but some nods toward the idea of hiring a different and more diverse workforce. They said nothing about unions.

And one of the things that was difficult. So I think that maybe the catalyst was DOE announced preliminary approval of a $9 billion loan to Ford to build a battery operation in Tennessee with neither union nor wage conditions on that. And now I will point out that agreement has not been finalized, but it was announced as if it was.

And so, it led to the prospect that this energy transition was going to end up with fewer jobs and worse jobs for union workers. So what are we going to do about that? So I think we’ve made a lot of progress on this, but sort of recognizing that these are different things and we need conditions on both. And we’ve been able, actually, particularly if you look just a few days ago, there were some grants on industrial decarbonization released. Every single one of them had a strong provision, either union neutrality, existing union, or some kind of real training program for underserved workers.

Let’s– I talked about this. So that’s kind of my first point is thinking about addressing– dealing with goal conflict. We can do it. We have to do it. Kate said before the talk, everything bagel or no bagel. And I think– and we figured out how to manage it, right? [LAUGHS] How to get all the spices on the bagel?

So the second issue is addressing coordination failures. And so, here, I think, again, analysis is key, and academics can play a role here. Let’s analyze incentives and supply chains. So let’s not just map that this thing is next to this other thing, or this person supplies this other thing. Let’s understand how they interact, what their incentives are.

And so the 2021 chip shortage is one example, which initially there was some thought that the chips were somewhere. We just had to find out where they were. And, then, when we looked and did some analysis and a survey, it was like, well, no. Actually, the automakers, who probably would have had some kind of crisis, maybe not as acute even without a pandemic, the automakers plan to double the number of chips per car as they electrified, as they added entertainment systems, et cetera. But they didn’t tell anybody these chips were embedded in second and third-tier suppliers, who they didn’t communicate with directly.

So one of the things that the White House did that was extremely helpful was not any money, it was convening. The White House, the head of TSMC met the head of Ford. Head of Samsung met the head of GM. They started thinking about actually talking to each other directly, which they had never done.

A second kind of thing– So trucking, this was another issue. There’s all kinds of issues with trucks, particularly around the ports. It’s like, oh, no. Wow. We need more truckers. Well, when you look at it, there are millions of people that have a commercial driver’s license. They choose not to use them. Why, these are terrible jobs. So training more people is not going to fix that problem. You have to directly address the job quality issue, which, to some extent, has happened. I think, there’s still more work to do.

The third thing I guess I want to say is talking about building communities as well as markets. Another great idea from Cohen and Zysman. And talk about, I guess, two examples, one that I just thought was kind of dumb, I didn’t understand the importance. In August 2021, the president announced his goal of 50% of auto sales in the US would be EVs, either EVs or plug-in hybrids, by 2030.

And that was a really important moment, partly because of what happened before, which was a lot of discussion with automakers with the UAW. What are your product plans? Are we leaving– going to leave some stranded assets behind that you won’t be able to use all your assembly plants or whatever? Figure that out. And then the public announcement is everybody’s kind of rowing in the same direction. There are some hiccups, but I don’t think this particular goal, hopefully, is not in danger.

The second point here is that demand signals alone are not enough. And I want to talk about this in the context of lead service lines. So these are water lines that connect the water in the street to your house. And many of them, particularly in places like Cleveland are lead. Lead is terrible. It leads to all kinds of childhood retardation, et cetera.

The Biden administration has committed to replacing all of them. It is a huge thing. And so there’s money to do this. We actually have money. But it’s a huge spike. This is largely money from the Bipartisan Infrastructure Law, $15 billion. And so there’s this incredible spike in money. You might think– we thought, oh, hey, screaming demand signal, markets work, people will figure out how to do this. Well, let’s see, there are seven layers between that federal demand signal up here and then, down on the right, the manufacturer.

And these are not close collaborative ties between any of these layers. If you’re a manufacturer, you may read something about Bipartisan Infrastructure Law. You have no idea what Congress does or if that’s like real money or whatever. All you see is maybe you used to be getting orders of one or two parts from some domestic– some city water authority, and now you’re getting three or four. It’s not like I’m going to dramatically increase.

So what did we do? We held a convening, and these were the slides actually from this convening, that talk about, look, hey, look. There’s money here, opportunity. And then, a little bit about, this is what we think it’s going to mean for particular parts. 6 million corporations stops at a minimum, for example.

And let’s see, there’s also some information about federal– about bipartisan– the Made in American laws. And then asking questions, so bringing these people together, asking them what barriers they see. Trying to create a community so people talk to each other. This is not automatic. I studied supply chains. I was surprised, but it’s been something. I think it was a lot of real improved policy.

Let’s see. So then the third topic I want to talk about is a little bit– is supply chain. I don’t know. Any comments, questions, so far? OK.

So I think we lived through some of the problems of lack of supply chain resilience, lack of access to personal protective equipment, like masks, et cetera, lack of ability to get various inputs. And so the two solutions are discussed to this, the one that’s typically discussed, I would call redundancy. This is have more suppliers hold more inventory. And this solution actually has a bunch of issues to it. It adds cost, and it may not work. So we had a stockpile of N95 masks, people looked in it during the pandemic, found out all these masks were expired.

So you may not have the right stuff at the right time. And so better, in my view, if you can to build agility. So the idea here is you reduce lead times so that you can quickly respond, identify a need, make the masks. And so you can do that by investing in surge capacity. Maintaining collaborative relationships between suppliers and customers so you can identify problems quickly build problem-solving capability.

So one of the issues actually was yeast. And it turned out the problem was that Fleischmann’s required a single type of jar from a single plant in India. And it took them months to figure out an option, an alternative, to work with their machines, which turned out to be plastic bags. And you could imagine, and this is the kind of thing that Toyota drills on is, well, what else? If that’s not available, what else can we do?

Yeah, so– and just to hamper this, because this is a debate I’ve not fully won, even though I got all this stuff in the economic report of the president. [LAUGHS] Low inventory is not necessarily bad. The problem is if you have low inventory and low fragility. And so another key reason for rebuilding domestic production is to increase agility, reduce lead time.

So what are the implications of this view? I think so the first one is location policy. We talked about that. I also want to emphasize that I don’t think that there’s any view that we should have 100% production of all manufactured goods in America. We need more. And in many cases, there is no conflict between diversified supply chains and domestic production. If you’ve got 90% of your supply coming from China, adding US supply makes that more diverse.

A second thing is that– it’s another reason why we want generally trained workers, so apprenticeships rather than quick training programs. And then, finally, competition policy. So I’m fully on board with anti-monopoly. But in the limit, more competition is not always better.

And so, I’ll just give one example, which is the generic drug shortages. There’s a proposal now that hospitals should have to hold more inventory as a hedge against drug shortages. We should look at the root cause. And there’s been work in the White House to do this. And the FDA actually has great reports.

There’s a combination of excess competition at the distributor level, and then that leads them to really push cutthroat competition, largely in India, of, 8, 10 suppliers of particular drugs, who then gradually, it’s a race to the bottom, they go out of business. And in contrast to the US, the FDA inspection may be once every two years.

So some of the shortages are caused by people kind of all of a sudden going out of business. Sometimes it’s because the FDA happens to go to the facility, finds an intolerable situation, and shuts the plant down. So you can imagine a much better way of dealing with this problem than hold more inventory in hospitals. OK, so that’s my rant on that.

Two more quick things. One is design good jobs. And just, there’s a lot of discussion. I never thought, studying manufacturing, that the problem would be skill shortage, as opposed to unemployed workers, but here we are. One problem is that the manufacturing wage premium has declined. And so people, again, don’t want these jobs.

And it’s a problem that many firms can’t just raise the wage because they don’t have a productivity recipe that would allow them to pay a higher wage. So what do we do about this? And so this is an opportunity, I think, to bring in additive– automation, AI, ML, in a way of enhancing these jobs.

But we need to, I think, design these jobs, and ideally co-design them, the product, and the process, and the technology, and the workforce training, all together with worker representatives in the room. And not just kind of take skill demand, and employers present as given. And employers, first of all, often don’t think so much about what they need. They just want the worker they had last year.

And they also don’t really value things like worker mobility. They may not value resilience because they don’t see the problem very often. And so, there’s some efforts like this to work on this. So there’s the battery workforce initiative at DOE that Anna has worked with that has brought together these various actors to try to think about designing good jobs in this new occupation.

So then the last issue I want to talk about is self-reinforcing progress. And so this is another White House slide where we’re sort of talking about it, all stages of the technology readiness level we have programs, from research, to development, to demonstration, to deployment. And these are really cool. And I would be happy to talk endlessly about them. [LAUGHS]

But I want to raise a couple of issues about whether the current investment can put the US on a permanent path for green innovation. And so, things are getting better. Initially, there’s a real focus on production. We’re now thinking about including other parts of the value chain, particularly equipment design. You don’t get to world-class competitiveness if you’re just buying the same equipment as everybody else.

The issues I think for the future are how do we encourage the current construction that happens at scale to include the latest techniques, including not just big companies but small companies? So we’re really lagging in adoption of Industry 4.0 sensors, et cetera, that could dramatically increase uptime and quality, and all the things that we would like to be competing on.

A second issue is developing a transition path within an industry. So he actually did it for electric vehicles. We worked with a consultant and figured out the path of every model of every company and when it was likely to sunset, and showed that this 50% goal was consistent with stranding none of them. I don’t think that that kind of analysis is being done for different kinds of battery chemistries, for different kinds of solar panel technologies. Part of it’s because it’s not totally clear what the next stage is. But these are all issues that we need to think about.

So, this brings me to future research. [LAUGHS] And so, I think I have, I guess, four topics. One is building and renewing these productive linkages. And I think there’s real potential here for kind of engineering tech knowledge and incentive design. And so, we really need, I think, a theory of friendshoring. If we’re going to–

So friendshoring is the idea that we don’t necessarily need to make all the semiconductor equipment here. We could rely on ASML and Netherlands. Or maybe India should make solar panels. Or Malaysia has cheap labor, maybe they should do packaging. And some of that does obviously makes sense. But let’s think about what linkages we’re not developing and what does that mean for future innovation across these linkages.

Second is job design. I’ve talked about that. Third is democratic finance. Essentially, these policies largely rely on bribing capital to invest. I know Daniel has thoughts. And then the final one that I also feel like you all know more about is improving the policy process. There really is a process that’s like a production process. There are inventories. There are lacks of skills. There are excess silos. What can we do to do a better job of procurement, with risk and reward sharing, et cetera?

OK, so conclusion. [LAUGHS] I think well-implemented industrial strategy can optimize linkages across sectors and stages of the value chain. And I think it can also overcome the two key objections to government action that I mentioned at the beginning. The first idea is that government agents lack appropriate incentives.

I think one of the things that we’ve talked about is that there are mechanisms for government agents to maintain and resolve diverse goals, that kind of a single-minded focus on short-term profit maximization is going to leave a lot of problems, government can help with that.

The second is, how can the government pick winners? It doesn’t know anything. Well, I think we’ve seen that there’s a bunch of ways that government has better information. It can convene, it can collect proprietary data from firms and feed it back in aggregated form. I’m happy to give examples of that. And then, there’s a whole lot of work. Improved design, implementation, and state capacity. So with that, I look forward to comments.


[ARI BENKLER] Right. Well, thank you so much. And first off, thank you for the presentation. It was terrific and super interesting. So I want to lay out basically five big questions, both for discussion and to get your views on directly. The first is really about the role of politics and the idea of building a stronger coalition for green growth in the US political economy.

And you refer to the kind of importance of the labor climate and DEI coalition. And obviously, firms play a significant role in the interest group landscape that we’re working with in terms of the policy process and inputs to what’s actually able to be done at the governmental level. So, I guess, you spoke a little bit about whether or not and in what ways the current climate policy regime and the industrial policy regime can put us on a permanent path towards a green growth type of model.

But I guess my question is, how does the variability of political will over time condition policy design? More specifically, how do you think about designing policies that commit the US to an ambitious industrial policy pathway in the face of what’s likely to be very active, well-funded, and strategically sophisticated resistance from a whole set of political actors, both in partisan politics and in the economy, firms in particular, peak organizations of industry, et cetera? So that’s question 1.

Question 2. So you’ve emphasized the importance of resilient supply chains and talked a little bit about different approaches, the redundancy versus agility. You’ve also pointed to the role of onshoring and reducing supply chain vulnerability. And when I think about the goals of something like the IRA, green industrial policy, or industrial policy broadly, my sense is that there are three high-level industrial policy objectives. And I’m curious both on this typology and on what you think about the tensions among them. So one is building resilient supply chains, the other is promoting a domestic manufacturing economy and a renewable energy industry in particular.

The third is achieving progress on the energy transition as quickly and at as much scale as possible. So, as you said, these goals are kind of sometimes well-aligned with one another and other moments in tension. So the first question is, really, do you think this is a fair delineation of the universe of objectives? And the second is, how do you think about the relationships between these three things? And you mentioned some strategies for optimizing on these tensions, but this seems like a really fundamental problem in industrial policy, is to think about the relationship between these different goals and how to manage the competing tensions. So that’s the second question.

The third is about free trade and trade policy, so especially relevant. I think you’ve written in the economic report of the president, among other places, about financialization of the economy and the turn among corporate decision-makers towards hard information, financial metrics that are easily observable. How do you see a shift in management culture towards considering soft sources of information? Or do you think that that’s off the table, and really what’s needed is to create new sources of hard information, create new metrics that then get imported into the hard information kind of framework, and used as things that orient goals and long-term thinking among firms?

Fourth question is more about the geopolitics of supply chain resilience. So supply chain resilience, as I see it, is at least substantially about insulating supply of critical production inputs from regimes that are politically unstable, trade partners that are not reliable, potentially adversarial. US relationship with China and tensions with China have been kind of a paradigmatic example in the last few years.

So I’m wondering how you, or how we ought to think about securing resilient supply chains and the kind of risk that comes with pursuing economic disentanglement, not full disentanglement but some disentanglement, and the need to continue cooperation with partners, especially those that are adversarial or not kind of securely in the same camp as us on the international political economy scene? Whether those two things are in tension, if so, how to manage that tension? Or, if not, how we can see our way to pursuing those goals at the same time?

And finally, I want to ask about the chicken and egg problem. So other than its convening power to get manufacturers of final products in the room with upstream suppliers, how does government– what are the universe of strategies we should be thinking about to solve the chicken and egg problem? And where convening power is not enough, there have been.

I think, at the state level, particularly in New York, the Build Public Renewables Act, there are these proposals that are not primarily directed at public equity as kind of the main strategy for building solutions in solving the chicken and egg problem, but at least kind of hold the threat of public investment over the private sector and say, we want x volume of this particular key set of goods and by this date. And whatever isn’t successfully produced in the market by that set deadline, the government is going to step in and ensure that the supply that we think is critically necessary for all these strategic and normative reasons can be had.

So obviously, that’s something that intersects with the political climate in a way that’s not so simple. But I’m wondering whether you see limited strategically targeted roles for public equity and public investment that actually rather than just catalyzing private investment, is about retaining public ownership over key strategic assets? Where do you see that in the universe of solutions and strategies that government can have, particularly with respect to chicken and egg problems? So that’s the universe of questions that I wanted to put forward. And thank you again.


Would you like to respond?

I think, yeah.

[DANIEL ALDANA COHEN] OK, the awkward part is I’m also building up to five questions, but there’s some overlap. It seems like guys with scruff tend to talk this way. OK. OK, so first of all, let me just say I love this presentation. I’ve been a big advocate of a Green New Deal and working on policies with politicians like AOC and Bernie Sanders, and we’re always talking about more government, more ownership, more intervention, but there’s often kind of a black box. And once you peer inside of it, it’s extremely complicated. And so, there’s, I think, it’s just so great to get that from the inside perspective on all these challenges and opportunities.

The question that kind of keeps me up at night is like, how do we meet extremely aggressive targets for decarbonization? How do we do that in a way that doesn’t foreclose action on the biodiversity crisis? Which in the meme is arguably the even bigger wave coming behind the crisis in nature? And what can green capitalism do on these fronts? And what can it not do?

And so I’ve been thinking about five main tensions or contradictions within green capitalism. And I think they each raise questions for you. So the first is a tension between decarbonization and biodiversity. So the question is, like, do we rob the biospheric Peter to pay the low-carbon Paul? Do we mine desert ecosystems to the bone for enough lithium for enough EVs, but at the risk of hastening an equally existential ecological crisis?

So, I guess, one question I have is, can we expect a better, or even this industrial strategy, to balance that tension? And if yes, can we get there without waves of social movement mobilization, localized protests by Indigenous nations, negotiation, some repression, et cetera? Or do we need a different kind of industrial strategy that really works harder to balance biodiversity with decarbonization? I mean, I think the two can be advanced together, but it won’t happen automatically with free markets.

I think a second tension is between developing green projects and making holistic green system change. And you talked a lot about some of the coordination dilemmas. I think we could think of others, like a big example, of course, would be the grid. So under the IRA, it’s getting a lot easier to build a solar array or to build wind turbines. But the problems with the grid are quite substantial.

And it’s not even just the big grid, but then the small grid or the grid edge in every building around the country, the optimization of which could dramatically reduce the amount of build-out we have to do. So peak power demand in the US is double median power demand, and so if you only have to build out half because you even out the peaks with grid edge technologies, that’s an amazing asset for the ability to go quickly.

It seems like the US government would need a lot of work to really become like a coordinating developmental green state. Working through budget reconciliation creates like major limitations. And so, I’m curious for you, from the inside, like, what do you see as the best path to more muscular and effective coordination to achieve this kind of holistic system change? How much is that a whole new kind of legislation? Or with the tools that already exist, like with EV charger example, can you kind of model one’s way through?

The third tension, I think, is between green capitalism’s reliance on states and corporate primacy. They don’t want to rely on states. So green capitalists need the state to de-risk big investments, especially in areas like infrastructure, and to help with big upfront capital investments. But I don’t think that capitalists like being told what to do, which can happen if you depend on states. They’re probably not eager to be told that you need better-trained unionized workers, and so on.

So you’ve seen this from inside. And you put it to me earlier that there are some concerns, are we just bribing capital to do stuff. So I’m curious, how receptive do you see firms being to the level of public intervention that you think is necessary to make this work? To the extent that they’re not receptive, what will it take to kind of discipline them, to add more sticks to the carrots, to raise more revenue as well from the wealthy and from big companies, and really to direct them into the activities that you think are most important? Because I think there’s definitely scope for more public action, I think. But certainly not everything, and we are on a very short timeline.

OK, fourth, I think this is very brief to say there are real tensions around the rising cost of care for people and ecosystems. Now, even capitalism needs healthy workers, well-trained workers, as you alluded to, and enough ecosystem protection for there to be a planet to make a profit on. People want decent schools, they want retirement security. This is extremely expensive.

And I think what we saw, there’s an important lesson in the fact that what big part of what was lost from the Build Back Better to IRA transition was the substantial care economy proposals from the Biden admin. I mean, almost a step change towards social democracy. But the economic base behind that wasn’t remotely comparable to the economic base behind much of what was in the IRA.

So I wonder, and I think you alluded to this a bit around services, there also, by the way, I think, questions around adaptation, like zero-profit work and things like restoring wetlands, adapting to wildfires, and so on. So that’s also expensive. So I guess my question is, to what extent do we want to rule all this under industrial strategy? Or do we just simply need a different policy pipeline, a different set of actors and interests, to mobilize around the care economy?

OK, and then the final fifth tension, and you alluded to this as well, Ari, is, I think, a political coalition tension. I think– I suspect, green capitalism would prefer to live in the world of the Financial Times chief economist Martin Wolf, which is a world of like benevolent, corporate-friendly green centrism with careful subsidies and elegant carbon price, a safety net that’s strong enough to ward off fascism but weak enough to incentivize hard work.

And I think, in some ways, Bidenomics is a move in that direction. I think Macron in France is another version of that. But I have serious doubts as to the long-term political viability of that kind of coalition. And I see a lot of energy on populism on the left and right. My suspicion is that the kind of strategy you’ve outlined is better suited to a left lean than to a right lean.

But I’m basically curious, like thinking about a President Hawley or President Rubio, or President Warren or Ocasio-Cortez, I mean, how resilient are these strategies for resilience in the context of rising left, rising right, in the sense that a Bidenism maybe represents a powerful centrism, but I don’t know what its political basis is going forward? So that’s like 10 questions for you. I think I’ll cap it off there. Thank you so much for a brilliant talk.

[SARAH DIMAGNO] Thank you so much for these comments. Yeah, Professor Helper, if you’d like to take a moment to respond to some of those, please go ahead. And then, we’ll start–

[SUSAN HELPER] I don’t know. Everybody’s been really quiet. If other people want to jump in, I’m happy to do that– or I’m happy to– well, I’ll say three– try to do three minutes. I mean, these are all incredible comments. I am quite worried about whether it’s enough. I also think, I would just come back to Kate’s comment about, I think, everything bagel or no bagel. And then the question, do you think the everything bagel isn’t necessarily enough. We need the Danish, too. I don’t know. And I’m not–


[LAUGHS] I’m not unsympathetic to that idea. And I guess I think– we were talking last night about windows and agendas have changed a lot about what’s possible. It’s also true that we’ve frittered away our time in terms of before there’s true and complete climate disaster. So there’s both more possibility, but and more urgency, and can we deal with that. And so, I mean, to me, it seems like there’s a bunch of maybe education and coalition-building that I think it is partly with management.

I think Intel has changed a little bit. They have an engineer again, as their president. They saw that they had blown– there was– actually, my understanding is a realization that they blew it by not investing in the 5 nanometer chips. And that this was a once-in-a-lifetime chance to get a second play. Obviously, they are not our complete and total friends. We don’t want to overestimate that.

So I think to Ari’s question, I mean, I feel like there both needs to be a kind of qualitative discussion of hard and soft information, and that management needs to understand the value of resilient supply chains. And government should also be helping management to value that. But then sticks if they don’t. So this idea of a public option for Green energy is something I hadn’t heard before, but I think is really cool.

I do think that one of the urgent, I guess, kind of technocratic design questions is this finance question. That it does seem to me, I guess, infeasible to continue on this method of massive subsidies. I don’t know. I mean, I’d be interested in others’ views, and if we had a bank and we have companies, particularly small companies, who would borrow at 14% interest rates, and that’s not the social cost of capital. It’s far higher. And can we make that lower cost of capital available to companies that want to invest in green projects?

Yeah, I think many of the things you raise I don’t have answers for. The biodiversity crisis, I guess, I would say, I think one of the other problems, and since I’m not an administration. To speak freely, I do worry a lot about, there’s not very much to incentivize either small cars or non-car methods of transportation. And I think you have some work that suggests that that’s– we can dramatically reduce the amount of lithium that we need if we do a better job on that. I think the politics of that within the coalition are really hard, but need to be addressed. Let me stop. I think this is really, really helpful.

[AUDIENCE MEMBER] In the business school context, and maybe law department– law school context, this question of the firm, and which is kind of a black box sometimes in the way that we talk about it. But in an ideal world, what kinds of changes would we see in the management and governance of firms. And I’m not just thinking about– or maybe it is short-termism versus long-termism, but it also seems that at different times in different places, firms can be more aligned with projects of national transformation and redevelopment and that kind of thing.

And as I’m also a lawyer, and it doesn’t seem like there’s a lot of legal constraints on that if you have good legal advice under US corporate and securities law. So what kinds of norms would we like to guide the people who run firms that would align with this? Or do you have any thoughts on that? Thanks.

[SUSAN HELPER] Yeah. I guess, I think there’s a bunch of ways to make profits. There’s sort of high-road and low-road ways. And as a society, we’ve done a lot to make it easy, and make the easy path to be the low roadway. And including in our public statistics, if you want to, it’s easy to figure out where to go, where to locate your plant, if you want to minimize wages and minimize taxes. It’s not that easy to figure out, oh, I want to go where I have a workforce that’s trained and it’s going to really offset that stuff. So I think that’s one kind of thing.

And so, I think there’s often two ways that a firm can make profits. And then there are these fights within companies. So you’re thinking about Boeing that, for decades, the thought was, we need to have this engineering culture. We make profit– I mean, I think there’s also an issue about long-term profit maximization, but our key is that we do not make mistakes, and we have many checks, et cetera. And those are systematically removed by the bean counters, and to a point where it led to disaster.

So, I think– Yeah, there’s a combination, I guess, of carrots and sticks. So let’s make it easier for firms to adopt a high-road path, let’s make it easier for them to find apprentices, publicize that model. Let’s make it easier for them to understand the costs of a far-flung supply chains. And then let’s have sticks. If they don’t do it, let’s have alternatives, I guess.

[AUDIENCE MEMBER] So earlier today, we were talking about–

So earlier today, we were talking about how, instead of money being spent on R&D, it’s being spent on share buybacks. So I was wondering what you think what financial regulation you think needs to be undertaken in order to improve industrial policy? And then related to that, would you say that the interests of finance capital and industrial capital are inherently antagonistic? Because industrial capital is actually owned by finance capital, since the majority owners are asset managers or other institutional investors? So I guess, more directly, what concrete financial regulation reforms would you do?

[SUSAN HELPER] Yeah. Wow. I would love to get the abuse of the group because, I think, I have probably primitive answer. You could ban stock buybacks. I guess I like this idea there’s now a 1% tax on stock buybacks. We think it’s an unproductive– you sort of think that organizational capital is hard to build up and it’s valuable socially, so we want to charge companies for dismantling it. So let’s increase that level of tax, I guess, would be my first thought.

I also think that providing ways for companies to get low cost capital to engage in socially beneficial production is a good thing. So the World Bank– I mean, the export-import bank is now lending to projects that are largely domestic in their output at very low interest rates.

I mean, it seems like they don’t have to be in tension because one of the ways that finance capital makes money is when the Industrial capital sells products at greater than their cost. Particularly– Yeah. And so, can we get back in line incentives and how do we do that. And I think it’s a mix of carrots and sticks. And then, this maybe softer cultural work, but I really would be interested in what other people think.

[AUDIENCE MEMBER] Thank you, Professor. My name is Stephen Leezak. I’m a visiting PhD student in geography at the University of Cambridge. I have an election-year question. How do we make industrial strategy, and particularly good and effective industrial strategy visible to voters?

[SUSAN HELPER] That’s a great question. I think some of it is you’re being clear about what we’ve done, tell a better story. Those slides I showed were an attempt to do that. There’s also tons of work with local media around, here is money for your plant and your small town. I think turning to validators, frankly, I think it was great that Shawn Fain didn’t immediately endorse President Biden.

First, it got– I think it helped get to a better policy in terms of making sure that the green transition does benefit autoworkers more broadly. And then second, I think it builds credibility. Those are, I guess, my ideas. But I think it’s really– yeah, really important to just show the work that’s been done and tell a story about what’s happening, what has happened already.

And what the plan is, what the future– what is the vision. I mean, I think Trump has– is inarticulate what his vision is, but sort of everybody has this kind of idea of 1950s, white people. It was great. And can we have a more better vision that’s clearer to people that’s plausible?

[DANIEL ALDANA COHEN] I might just jump in and say something. And curious what you think of this. The policy feedback is tough because you need a bit of time. Like it’s going to take a minute to build this stuff. To me, an opportunity that would also take time, but would be exciting to think about in the future if there was an IRA 2.0 is more housing and more schools.

So like, 50 million Americans go to school, K-12 school, so basically from kindergarten through grade 12. And then most– unfortunately, not all people have a home, but most do. And these seem areas where you could get tangible improvements. There’s culture war issues too. But the slogan that I’m after is like the Green New Deal is climate policy you can touch.

And so how can you make this stuff literally tangible. And that’s the question I have. And I think unfortunately, some of the ways that DBB was slimmed down. You lost some of those more tangible things. And then to flip it around. What I think is, if you ask a working-class person, is green invest– who is green investment for? And if they say it’s for me or my community, you’re winning. And if they say, it’s not for me. Then you’re losing.

And they might still value it, like you might value Whole Foods as a nice thing you can’t have, and might resent. But so I don’t think there’s a problem in convincing Americans that the green is a nice to have. But it may be harder to convince them that it is like for them and of them and kind of by them. And I agree with you, 100%. That Shawn Fain is maybe the best messenger you could imagine for that. I mean, Biden could– I think pretty good too, but Shawn Fain obviously has a different advantage there.

[SUSAN HELPER] Yeah. I mean, I think this is one of the issues in the IRA is that there are these very– there’s all kinds of generous tax breaks in the IRA for greening your house. I kind of worked on them. I don’t quite know where to begin. My husband is an engineer. I think there’s some work by rewiring in America to make this easy path. But there just needs to be so much more work on that.

The Green Bank hopefully will be doing solar projects and people. And people will see their energy bills fall. I do think, just a legacy of the financial crisis, that I see every day in my neighborhood in Cleveland is just terrible disinvestment in housing and financialization of housing that is a really bad, missed opportunity. And I don’t feel like I have any knowledge beyond that, but really important to address.

And I think also, just these general things that provide consistent with values. I mean, I think hammering on drug prices is a really good thing. It pulls well. Hammering on, we’re going to prevent wildfires. Even, like, minor– what seemingly minor stuff like improving government websites.

So Jennifer Palka has this great book, and she talks about most government websites are designed to be used by people who are paid to use them. And so, they’re professionals, and they go to training on them. This is not new And that’s why was a disaster. It was designed for someone like that, it was not the user. And so, there’s been a lot of learning on how to make it better. But there needs to be more.

[AUDIENCE MEMBER] Hi, Sean Caulk technology strategy consultant, and I work a lot with automation conversions for SMEs who are, they wouldn’t say this, but trying to make an industry 4.0 transition. Question is of capital, labor, you’ve already brought up geography, but a lot of these policies, whether or not they are intended for SMEs or for large corporations.

Like you just said, companies that are– understand the implementation of the websites that are intended for them, the SMEs don’t necessarily have the time or bandwidth to engage in these policies or the benefits, or any of the– even labor pools that they might be able to help. So what is that balance on a much more agile industry with these smaller groups can very quickly redirect all of their workforce, their capital, and their assets? What are good ways to interact with those as opposed to just the enterprise groups?

[SUSAN HELPER] So, I guess, I have a question for you, because there are actually agencies that are supposed to help. So one of them is the Manufacturing Extension Partnership. Is that something that your firms have ever heard of or worked with?

[AUDIENCE MEMBER] No, anybody that finds me has not. [SUSAN HELPER] And is that– I mean, have you ever worked with them?

I did [INAUDIBLE] ARM with them.

Oh, OK. So ARM is what? can you describe what ARM is?

For the advancement of the advanced manufacturing–

For robotics, advanced robotics. Yeah.

Yeah, so I was working on the [INAUDIBLE]

[SUSAN HELPER] I mean, I guess where I’m going with this is, there is an effort to– one of the ways to overcome this problem is to actually provide somebody that you can call that will walk you through this. And so there exists the Manufacturing Extension Partnership, which has– it dates back to the 80s, offices in every state.

It’s done a lot of work on the kind of lean transition, with– and generally, maybe smaller and less savvy firms than what you’re dealing with. There’s a desire to help them work better. And I the theory, the manufacturing extension partnership in Pennsylvania is working with this– the ARM group in Pittsburgh. So yeah, maybe we can figure out better ways to make that work better.

There’s also a group in the Department of Energy, the Industrial Assessment Centers, that has also existed for a while that provides. So will go in for free and tell a business, here’s a way that you can improve your energy use. And now, as a result of the infrastructure law, there’s access to small grants that would help you implement whatever their recommendations are.

So some of it, I think, is a desire to actually have a person that you can call, which sounds like this is not working perfectly. But– and again– to compete– not to compete with people like you, but to help them find people like you. And, yeah, so I’d love to talk more about how to make that work better.


[AUDIENCE MEMBER] As I listened to these three wonderful presentation in the sets of comments. It strikes me that there are four quite expansive objectives that are really involved. One is let’s assure that there’s a green biodiverse bioeconomy. Second, that there’s a competitive American economy rooted with good jobs. A third, that we have an equitable society filled with the social services that are required. And the fourth, is that we need a set of coalitions to support the first three.

So that the problem then becomes, where do you start because trying to do all of the above all at once probably falls on it’s falls on its face. When we were looking at the green issues a number of years ago, Nina Kelce, who’s now at George Washington, Eric Bieber who’s in the law school here, and actually simultaneously, for whatever reason, once also a PhD in political science, unexplainable. And Jonas Mechling, who’s in the School of natural resources, we talked about that. We talked about it, as what Nina called a green spiral.

In other words that the original support for Green came out of those who opposed smog in LA, easy to do. And that group then supported a lot of the anti-nuclear stuff, which then permitted a broader coalition. So as I look at this, I ask myself, which pieces do we start with, both to accomplish those three initial goals and to build the broader coalition?

I think Daniel was part of what you’re suggesting as resistance to a number of these things unless it addresses people’s immediate needs, i.e. Smog in LA. So– I mean, that’s the problem with– not with just this presentation, but in thinking through what needs to be done and how to do it.

[SUSAN HELPER] Yeah. I mean, I think one thing is to the extent that you can find– I mean, the smog example is really helpful. And air pollution is it’s not a kind of global public good. You can dramatically improve the air in your community. And so, there’s actually a bunch of really interesting and cool things going on in the Cancer Alley, in Louisiana that hopefully you get your people there are ideally seeing improvements already in their air quality, and hopefully they will get registered to vote and change things, but–

I think, yeah, I like this idea of a green spiral. And I think it’s interesting because I think that if– I think about how DOE has set its priorities, it’s kind of looked at where are the big sources of greenhouse gases, what do we need to do. And so, that’s led them to focus on transportation and buildings.

Yeah, anyway. I need to think more about this and would love other thoughts, because I think it’s sort of driven in a technocratic way. What’s the marginal– where can we get the biggest bang for the buck reducing our carbon for the lowest implied cost? And not thinking about where is it that we’re going to produce the quick, invisible benefit. So thank you.


[DANIEL ALDANA COHEN] Hi, just super– I think I loved your answer. And I think– I mean, if the river is the big green coalition, there’s going to be many tributaries. And one is through environmental justice, like you talked about with the smog. But other rivers are just through economic justice, right? And so that’s the power in a way of this industrial strategy that says, oh, well. If you’re an autoworker, you just want maybe a higher wage, or you don’t want to have to move from factory to factory with the UAW contracts.

So there’s maybe part of maybe the beauty of this is the opening up of a whole bunch of different roads into that coalition, which might start with an environmental motivation but can start with a totally different motivation. And labor, I mean, the labor has really been brought in, maybe housing, folks with housing insecurity, which is like most of the country, could be brought in. So there’s different roads. And a more capacious economic strategy allows you to find more and more of them– tributaries. I mean, sorry.

[AUDIENCE MEMBER] Hi, there. Sam Appel with UC Berkeley Labor Center. Thanks for the talk. Question for you. The direct pay option within the Inflation Reduction Act, which for those not familiar, is the ability of subnational governments in the US to fund climate projects. That, from my understanding, the IRA– the direct pay can be used to finance all manner of different projects.

And I’m curious, where you think that’s going? How big the opportunity really is there to deploy money at scale for governments to really take on the project of production? Even in manufacturing where state-owned enterprises are not typical in this country.

And specifically, if you think, given your deep experience and witnessing the transformations that you’ve been a key part of, which particular industries and industry segments there’s really a big opportunity to deploy public capital as the means of production– in the means of production?

[SUSAN HELPER] Wow. What a great question. And we’d love to get other’s views on this. I have not looked up much directly into the direct pay. But one of the very cool things about the IRA is all of these uncapped tax credits. And so that’s one. And I actually hadn’t thought about the uses that you just said. I mean, so what it does is it means that nonprofits and cities could borrow money to build a municipally-owned solar panel array. And whether it’s kind of cool to think about how that would work.

And yeah, I guess I know Daniel has this proposal for government-owned offshore wind, and the idea there being that these are very large capital-intensive facilities. If you can finance them at the federal government cost of capital, rather than the private risky cost of capital, it’s dramatically easier to make it a pay off.

Plus you can have then better arrangements for users. So this idea of, where do you go first? I think is really a cool one. And I guess, I think, limited state capacity, you’d want to do something where it’s probably relatively well understood how to manage it. But I don’t know. It’s really a great idea.