Opinion: Industrial policy goes rural as policies of Congress and administration look to help 'left-behind places'

U.S. Rep. Ro Khanna, D-Calif. (Photo from Ro for Congress)

Rep. Ro Khanna, who represents Silicon Valley, has taken an active interest in rural areas. Khanna's rural focus has grown substantial muscle with the passage of four large spending bills, the American Rescue Plan, the Infrastructure Investment and Jobs Act, the Chips and Science Act and the Inflation Reduction Act, columnist Paul Waldman of The Washington Post writes: 

"Khanna has been touring the country to promote economic development in distressed areas, especially places Democrats don’t usually go. He noted that more and more members of his party now recognize that the decline in manufacturing was not only an economic problem but also 'it had a deep social cost, hurting the social cohesion of this nation."

Yes, Democrats will gain some political swagger if their projects are seen by voters, but Waldman writes, "When I asked [Khanna] whether Democratic losses in small towns and rural areas played a part in the design of these bills, in that they direct money to such left-behind places, Khanna brought up the White House chief of staff and two members of the Council of Economic Advisers." Khanna told Waldman “I know for a fact it was on the top of the minds of people like Ron Klain, people like Heather Boushey, people like Jared Bernstein — I personally have had that conversation with all three of them. And I’ve discussed it with the president himself.”

The Chips Act is now considered the highest-profile industrial project, "Though that law was signed only four months ago, the Semiconductor Industry Association claims it has already spurred $200 billion in private investment in 16 states," Waldman reports. "Some of those projects are happening in places where manufacturing has declined, such as a new Micron Technologies plant outside Syracuse, N.Y., and an Intel factory near Columbus, Ohio. But the bills also have specific place-based strategies meant to lift up entire areas that have fallen behind."

Waldman adds, "The rationale is that we suffer from inequality not only among individuals but also on the level of entire regions." Mark Muro of the Brookings Institution told Waldman the new industrial policies create “a geographical intervention: there’s a reason we’re seeing growing distrust of technology companies and economic elites. That economy seems to be taking place far from where people are. I don’t think you can run a successful economy where 10 metros on the coast dominate."