TL(PM) DIGEST: We have lift-off on America's new industrial policy
Plus the rise and rise of independents, House Republicans living in debt ceiling fantasyland, and fresh chaos in Sudan
1. Biden’s industrial policy starts to pay off
What happened? The Financial Times finds that companies have committed some $204 billion to more than 75 “large-scale” manufacturing projects since the passage of the CHIPS and Science Act and Inflation Reduction Act last year. These investments in semiconductor manufacturing and clean energy will create an estimated 82,000 jobs across the country.
Why does it matter? That’s a massive increase in private investment in these two industries, with the FT observing that the money earmarked since last summer amounts to “almost double the capital spending commitments made in the same sectors in 2021 and nearly 20 times the amount in 2019.” After American companies, Taiwanese, South Korean, and Japanese firms like LG and TSMC represent the next biggest investors in America’s semiconductor, electric vehicle, and battery industries.
TLP’s take: So far, two of the Biden administration’s signature policies appear to be working as hoped by spurring greater investment in specific industries—even if all the new investment in targeted sectors can’t be attributed to the CHIPS and Science Act or the IRA, these laws clearly provided incentives and gave powerful signals about the direction of public policy and national priorities. It also goes to show the strength of economic ties between America and its allies in East Asia—something that the Biden administration would do well to build on moving forward.
2. Nearly half of all Americans identify as political independents
What happened? New time series data from Gallup shows a near record high proportion of U.S. adults—49 percent—identify as political independents. One quarter of adults call themselves Democrats and one quarter say they are Republicans.
Why does it matter? The two major parties appear to be repelling Americans at a record clip. Nineteen years ago, only 3 in 10 Americans called themselves independent with more than one third adopting the Democratic or Republican party label, respectively. Despite billions of dollars spent every election cycle to promote party candidates and ideas, however, Americans of all ages are turning away from these broken political brands.
TLP’s take: Americans are turning away from the parties because they don’t believe they are adequately addressing the nation’s problems and instead pursue narrow ideological agendas that appeal to base audiences and activists only.
Browbeating or scaring Americans to get in line won’t cut it. A successful strategy for appealing to disenchanted Americans will require both honesty with voters about the complexity of most issues and a willingness to challenge the ideological confines within one’s own party.
3. House Republicans continue to live in fantasyland on the debt ceiling
What happened? Speaker of the House Kevin McCarthy (R-CA) addressed the New York Stock Exchange today explaining his party’s still-unclear approach to raising the nation’s debt ceiling to avoid economic calamity.
Why does it matter? House Republicans can’t get their act together to do what is right and necessary for the country. Instead, they continue to level vague threats and make exorbitant demands to explain their reluctance to take the sane and prudent step of raising the nation’s borrowing cap to cover bills that have already been approved by Congress.
TLP’s take: Extorting the nation’s credit for undefined and ideological spending cuts is a reckless and extreme move, even for House Republicans. If Republicans then want spending cuts, they should put them in a detailed budget and get down to negotiations with the Senate on spending bills that can pass Congress—not hold the country and its economy hostage.
4. Internecine fighting breaks out in Sudan’s capital
What happened? Fighting between competing factions of Sudanese military loyal to two generals broke out in Khartoum over the weekend, spreading across the country as these factions sought control over airfields and military bases. At least 83 people were killed in the violence, which involved fighter jets, rockets, and artillery striking military and civilian targets across the capital.
Why does it matter? Sudan’s generals were supposed to hand over power to a civilian government last Tuesday—the military deposed long-time dictator Omar al-Bashir in 2019, and overthrew its interim power-sharing government in fall 2021—but chose to bring the country to the precipice of civil war instead. The fighting also threatens to drag in Sudan’s neighbors: one Sudanese faction captured some 30 Egyptian troops and seven Egyptian fighter jets deployed in the country’s north.
TLP’s take: The last thing the world needs now is another civil war that inevitably draws a country’s neighbors into the conflict. Along with Saudi Arabia and the United Arab Emirates, the United States and the Arab League have called for immediate talks to end the violence; failing that, however, the United States and its regional partners will need to work hard to keep other countries—especially Egypt—from getting sucked into a Sudanese civil war.
Just one more thing…
Take a culinary tour of the Old City of Acre, an ancient eastern Mediterranean entrepôt now a mixed Arab-Jewish town in modern Israel.