Industrial Policy

Veronique de Rugy | 1.29.2026 4:25 PM

Industrial policy is failing, and not just in Washington. Across America, officials promise to engineer the right economic outcomes by intervening in the market in just the right ways. Most people know that under Presidents Joe Biden and Donald Trump, the idea has exploded. Less appreciated is how enthusiastically governors and state legislators are embracing their own versions.

They repeat the same claims: With the right mix of subsidies, protection, and political direction, one government or another can revive strategic industries and deliver durable economic strength. The results tell a different story.

Wherever it's found, industrial policy is producing wasted resources, distorted incentives, and fragile outcomes that collapse the moment political support shifts or market realities intrude. Just look at the similarities between Georgia's famous film-industry tax credits and a few of the federal government's favorite projects.

A recent Wall Street Journal investigation into Georgia's experience reads like a textbook example of how the model fails. Film–tax credit schemes are sold as investments in business "ecosystems" and middle-class jobs. In reality, they are either a subsidy to production companies to do what they would have done anyway, or they are bribes to highly visible, highly mobile........

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