Industrial policy is a pillar of President Biden’s economic agenda (aka “Bidenomics”), and the White House recently cited a spike in U.S. manufacturing construction spending to show that billions (perhaps trillions) of dollars in new federal subsidies for “clean energy,” semiconductors, and other preferred industries—enacted in the infrastructure law, CHIPS and Science Act, and Inflation Reduction Act—are “working.” As I noted in a recent column, however, there are many reasons to remain skeptical of these subsidies’ overall economic benefits, even assuming they’ve actually encouraged new private investments in supposedly “strategic” goods. A new report from the Wall Street Journal provides a real-world cautionary tale in just this regard:

New York state paid to build a quarter-mile-long facility with 1.2 million square feet of industrial space, which it now owns and leases to Tesla for $1 a year. It bought $240 million worth of solar-panel manufacturing equipment. Musk had said that by 2020 the Buffalo plant each week would churn out enough solar-panel shingles to cover 1,000 roofs.

The Tesla solar-energy unit behind the plan, however, is averaging just 21 installations a week, according to energy analysts at Wood Mackenzie who reviewed utility data. The building houses some factory workers, but also hundreds of lower-paid desk-bound data analysts working on other Tesla business.

The suppliers that Cuomo predicted would flock to a modern manufacturing hub never showed up. The only new nearby business is a Tim Horton’s coffee shop. Most of the solar-panel manufacturing equipment bought by the state has been sold at a discount or scrapped.

A state comptroller’s audit found just 54 cents of economic benefit for every subsidy dollar spent on the factory, which rose on the site of an old steel mill. External auditors have written down nearly all of New York’s investment.

I highly encourage you to read the whole thing, which provides an almost textbook case for why we should continue to question U.S. industrial policy initiatives, whether part of “Bidenomics” or any other political agenda. All too often, the subsidies’ seen benefits are swamped by their unseen costs—especially after you consider alternative policies that could have achieved the same objectives with fewer taxpayer dollars and lower economic or geopolitical risks.

As I wrote last month about that U.S. construction spending surge and the “strategic” projects it’s supporting, “[m]aybe our grand, subsidy‐​driven ‘industrial transition’ will be worth it in the end (outside of favored industries, the sector is today struggling mightily), but declarations of victory at this stage are absurd.”

The Tesla factory in New York once again shows why.