Supporters of Vice President Harris are surely disappointed, but one of the pillars of the Biden-Harris administration, “industrial policy,” won big on Tuesday.

This is because both sides have already adopted it. President Trump loves expensive tariffs and Harris loves big subsidies for big business, and to some extent vice versa.

That, my friends, should disappoint us all. Industrial policy represents one of the most dangerous economic illusions of our time.

Often presented as a populist program, it is usually implemented in a way that does not differentiate it from the worst crony programs.

According to my friend Sam Gregg, an analyst on the subject for the American Institute for Economic Research and author of the excellent book “The Next American Economy,” industrial policy “involves trying to alter the allocation of resources and incentives, particularly economic ones.” sectors that would otherwise occur if entrepreneurs and businesses were left alone.”

It is also known by another name: central planning.

The tools of industrial policy include the provision of subsidies, tax preferences, trade protection, preferential financing, and regulatory advantages. To be sure, we already have plenty of that, including a tax code rife with exemptions for special interests and a budget full of costly subsidies.

What sets industrial policy apart is that it chooses certain economic activities to promote in an attempt to reorder our economic landscape, sometimes even for cultural reasons.

Democrats use it to force a transition away from energy sources they don’t like. They use mandates, subsidies, and tax incentives to permanently change the way we consume energy nationwide, whether we want it or not.

Meanwhile, many Republicans want to impose tariffs that push more people into manufacturing jobs and incentivize women to stay home to make America more like what it was in the 1950s.

Both sides want to force some people into activities that are not in their best interest. So, to achieve a national order that intellectuals and politicians prefer to the current one, the economy must suffer.

While industrial policy can direct funds towards specific targets or industries, it often fails to deliver on its promises and does not contribute to the genuine improvement of our culture and communities.

When governments attempt to direct industrial development through subsidies, selective tax breaks, and preferential treatment, they inevitably distort the market signals that allocate resources efficiently.

A clear example is Boeing. Decades of subsidies and special treatment have not made the company more innovative or competitive. Instead, they produced a culture of dependency in which political connections take precedence over customer satisfaction.

The same pattern repeats itself across industries, from green energy to semiconductors. Government intervention does not create sustainable competitive advantages for the United States; creates politically protected incumbents who become lobbying experts rather than innovating.

When incumbents lose their edge and their projects fail, they come back looking for money. Politicians who hate to see their “national champions” fail extend more subsidies and tariffs.

Some people are worried that this is exactly what will happen to Intel. Despite being the largest recipient of the Biden administration’s semiconductor industrial policy (the federal Chips and Science Act), Intel is having money problems, largely due to poor business decisions.

As Semafor reports, top Commerce Department officials and members of Congress are considering whether they will need to give more donations to the company because “Intel is considered too strategically important to allow it to get into serious trouble.”

Protecting a company from market discipline virtually guarantees that it will get worse rather than better. It doesn’t help that politicians often burden beneficiaries with counterproductive requirements.

Take, for example, the news that the Environmental Protection Agency handed out $3 billion in Inflation Reduction Act Clean Ports Program funds on the strict condition that ports not use automation.

Welcome to the stone age of industrial policy, where “keeping America competitive” does not mean keeping costs down for us consumers through efficiency.

Another major problem with industrial policy is that money goes to companies that don’t need it and to do things that would be done without subsidies.

Dominic Pino of National Review reminds us that another big beneficiary of the Chip Act, Taiwan Semiconductor Manufacturing Co., had “announced its intention to invest $12 billion in the construction of (a) facility in Arizona in May 2020. That was more than a year before the CHIPS Act. was introduced, and more than two years before it became law.”

I wish I had better news. If Trump and Congress do not begin a shift away from central planning, we will pay a high price.

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