American factories might come back, but the middle class won’t follow.

Since President Biden took office, a growing list of multinational corporations have pledged tens of billions of dollars to build manufacturing facilities in the United States. In the semiconductor sector, TSMC, Intel, Texas Instruments, and Micron collectively committed over $152 billion to bring critical chipmaking capabilities stateside. Electric vehicle battery manufacturers including LG Energy and Hyundai allocated $53 billion to build American plants. And while the manufacturing resurgence (such as it is) has been concentrated in high-tech sectors, there are notable exceptions including a $2.7 billion steel mill under construction in West Virginia.

To bring factories back, Washington had to counteract the trade deals that drove them away in the first place. In short, that required subsidies—lots of them. Last summer, Congress passed two of the largest corporate subsidy packages in American history. The $280 billion CHIPS and Science Act lured chipmakers to manufacture stateside with $52 billion in direct subsidies and $24 billion in tax credits. One week later, Biden signed the Inflation Reduction Act (IRA) into law, setting aside over $270 billion in corporate incentives for activities such as EV production and energy storage.

The new industrial strategy is commendable—if only on the surface. Since Bill Clinton ushered in NAFTA in the early 1990s, Americans have been fed the false promise of globalization. The resultant policies enriched the financial sector while decimating the industrial base and squeezing the middle class. Washington has now decided to roll back globalization, but it isn’t for the benefit of the middle class. Instead, the same financialized system that offshored the industrial base nearly three decades ago wants to onshore part of it today—not out of concern for broader national welfare, but to keep China from rewriting the rules of global trade.

For obvious reasons, the political establishment doesn’t want to frame it this way. The Biden administration claims to be rebuilding the American economy from “the middle out,” creating high-wage manufacturing jobs that don’t require a college degree. “Wall Street didn’t build this country,” Biden said in a December speech at TSMC’s $12 billion Arizona factory, “the middle class built the country, and unions built the middle class.”

Conveniently, Biden glosses over explanations of why middle-class jobs disappeared in the first place. He tells the story as: America had good manufacturing jobs, “then something happened,” then jobs went overseas, so now we need to retrieve them.

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