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 capital that can leave as quickly as it arrives. Georgia was the latter.

For years, Georgia marketed itself as the “Hollywood of the South,” luring blockbuster franchises with lavish, refundable tax credits (about $5.2 billion between 2015 and 2022) that could be converted directly into cash. The result was a temporary, subsidy-fueled surge in production followed by a predictable collapse, which became visible in 2023.

Labor costs rose. The boom empowered unions to extract concessions. Georgia’s competitiveness eroded. Other states like New Jersey and countries like the UK countered with richer offers or lower labor costs.

Today, Georgia is left with millions of square feet of underused soundstages and other stranded infrastructure, relics of productions that have already moved on. The numbers are damning.

This same pattern has played out repeatedly in states and cities that have tried to buy a film industry. This includes California, where ever-larger tax credits have been justified as “retention” policies rather than genuine development, at rising fiscal cost and with weak evidence of durable, net economic gains.

If film credits are the most transparently wasteful form of industrial policy, Intel is the most consequential. Under Biden and Trump, the already struggling semiconductor firm has been cast as a national champion meant to anchor semiconductor leadership. Billions in public support, preferential treatment and public ownership were supposed to deliver a turnaround.

For a time, the narrative worked. Starting in August 2025, when the Trump administration took shares in the company, investor enthusiasm surged and demand exploded. Stocks went up by 120% in five months. But industrial policy cannot fix operational reality, and perception cannot fix performance. Intel struggled to adjust after cutting capacity on older production lines, lacked customers for key new products, and was unprepared to feed the AI data-center boom. So now Intel’s stock is crashing again.

Then there are Trump’s tariffs, framed as industrial policy to reindustrialize the country, protect workers and lower prices. Instead, tariffs have quietly consumed much of the manufacturing sector’s profits. This is unsurprising. Most U.S. imports are inputs used to make American goods. Tariffs, therefore, are taxes on American manufacturing.

Industrial policy tries to engineer outcomes while ignoring processes. It assumes that political favor can substitute for market incentives. That innovation and customer demand won’t suffer. That shielding firms from competition will make them stronger. Instead, we get fragile industries that are dependent on even more political support.