China Charging, Americans Paying

China Charging, Americans Paying
Electric vehicle charger. (Roger Starnes Sr/Unsplash.com)
Thomas McArdle
Updated:

Commentary

The long-ago-discredited “mixed economy” practice of “industrial policy” is when the state, in its infallible wisdom, decides which capitalist ventures are going to be successful and pours prodigious amounts of the taxpayers’ hard-earned cash into them, the most infamous example being Japan’s Ministry of International Trade and Industry (MITI).

The late economist Charles Schultze, who held top jobs in the Kennedy, Johnson, and Carter administrations, understood the foolishness of industrial policy and illustrated the absurdity of a government bureaucracy picking private-sector winners and losers in a Brookings Institution paper. Mr. Schultze pointed out how MITI “tried very hard—and, as is evident, to no avail—to keep Honda out of the automobile business.” (It was thought back in the 1960s that consolidating Japanese auto production into several giant companies was wise.)

Black sheep Honda, of course, became Japan’s biggest automotive success story and the world’s largest manufacturer of internal combustion engines, as well as the first Japanese automaker that actually became a net exporter from the United States. Honda’s success would force the bloated, full-of-itself U.S. auto industry to reinvent itself to be more like Honda; even so, two of the Big Three found themselves in tailored bankruptcy processes while accepting tens of billions of dollars in federal government bailouts from presidents Jimmy Carter to Barack Obama.

Could someone in the depths of the bureaucracy of the Clinton administration, as it was boasting of wiring all public school classrooms to the internet, have identified who would be the most innovative and energetic entrepreneur of the next century when he was a 20-something eccentric from South Africa via Canada who already had two college degrees as he dropped out after two days of attending Stanford and was designing travel and banking software? Of course not.

Just as no “expert” in Washington armed with other people’s money to hand out could have found Elon Musk, no federal agency could have known that Michael Dell, who was repairing and building computers for friends of friends as an undergrad in the early 1980s in his University of Texas dorm room, would soon (after dropping out) become the corporate king of the personal computer.

Still, as absurd as a government-guided “free market” is with a country’s self-interest as motivation, can you imagine lawmakers allocating money for another country’s industries? For a foreign adversary, no less?

You need not imagine. For all intents and purposes, the United States under President Joe Biden is conducting an industrial policy—“improving the patterns of our investments,” as left-friendly economists Ira Magaziner and Robert Reich once defined it—in which U.S. taxpayers subsidize not selected American companies but those in mainland China under the ultimate authority of the Chinese Communist Party (CCP).

In the name of green energy and Chinese appeasement, President Joe Biden is poised to veto a joint resolution squashing a Federal Highway Administration (FHWA) regulation that waives some domestic manufacturing requirements for government-funded electric vehicle (EV) chargers. It passed the U.S. Senate by 50 to 48, with Sens. Sherrod Brown (D-Ohio), Joe Manchin (D-W.Va.) and Jon Tester (D-Mont.) and Sen. Kyrsten Sinema (I-Ariz.) joining with Republicans. Sen. Marco Rubio (R-Fla.) and fellow Republican Sens. Kevin Cramer (R-N.D.), Roger Marshall (R-Kansas), and Rick Scott (R-Fla.) put the bill in motion earlier this year.

They were spurred by the Biden administration foot-dragging on implementing $5 billion in authorized infrastructure spending for EV charging stations under “Buy America” manufacturing requirements, climaxing with a waiver allowing the installation of Chinese-made EV chargers until October 2024 but with the FHWA authority to extend that by five years. That means, as Mr. Rubio said, that most of the $5 billion in taxpayer money “will go into the hands of Chinese companies to build electric vehicle charging stations in the United States.”

And there’s a larger, quite disturbing context here, also the result of President Biden’s China-friendly, global warming-centric policies. EV-friendly tax credits enshrined in the deceptively titled Inflation Reduction Act have steered Ford Motor Co. to devote $3.5 billion to the building of a lithium battery manufacturing plant near Battle Creek in southern Michigan, a facility that will rely on the Chinese firm Contemporary Amperex Technology Co. (CATL), a Tesla supplier that’s the largest manufacturer of batteries in the world.

CATL founder and CEO Zeng Yuqun is a member of the Chinese People’s Political Consultative Conference (CPPCC) National Committee, a “critical coordinating body” led by the CCP’s Politburo Standing Committee, according to the independent U.S.-China Economic and Security Review Commission. (The lithium technology the Ford–CATL venture will use was designed by a U.S. firm that went bankrupt and proceeded to be scooped up by China at a bargain.)

President Biden even pledged on Earth Day last year “to start the process where every vehicle in the United States military ... is going to be climate-friendly.” This while China is on track to controlling a full third of the world’s lithium only two years from now.

It has been known for a long time that big-spending politicians have no trouble wasting—or lining their own pockets with—the people’s tax money. Now. we know they also aren’t averse to it landing in the hands of entities under the thumb of our preeminent long-term enemy in the world.

Thomas McArdle was a White House speechwriter for President George W. Bush and writes for IssuesInsights.com
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