The Biden administration is rolling out what it calls the “New Washington Consensus” in an attempt to fuse its domestic and international economic policy agendas. White House national security adviser Jake Sullivan delivered the contours of Biden’s agenda in a speech last month at the Brookings Institution. This agenda has also been used to frame Biden’s latest economic report, published earlier this year, and it will surely be central to Biden’s reelection campaign .

The unsettling thing about this new plan is that Biden considers Washington the source of America’s economic success .

At its core, the White House agenda is a “modern American industrial strategy,” the White House claims. In other words, Biden seems to think that he is better positioned to run the economy than the 330 million citizens who currently hold that responsibility by virtue of the economic decisions they make every day. Much of the language buffering this plan comes from the same playbook used for decades by Biden and other Washington Democrats.

Full of anti-free enterprise jargon, the plan blames tax cuts, slightly slower growth in government spending, modest deregulation, and business consolidation for every problem under the sun. Biden officials return to the old statist line that markets don’t “allocate capital productively and efficiently.” Hence, why Uncle Sam needs to take over.

Biden is not the only one pushing a new national industrial strategy, hitherto known as industrial policy. The nationalist conservative movement also advocates for industrial policy in pursuit of the “national interest.” The approach may be well intentioned, but it still requires that some politicians decide for you what the national interest is and how to manipulate the economy to achieve it, rather than allowing people to decide what constitutes the national interest through their daily decisions.

Both approaches to industrial policy are plagued with problems. The first set of problems is practical because politics cannot help but corrupt even the best of intentions. We are seeing how this plays out with the government’s recent involvement in domestic chip manufacturing, in which the Biden administration has made government subsidies conditional on implementing its social agenda to appease other parts of the Democratic political coalition.

These problems are not new. Government subsidies have long been handed out as a condition of joining one political coalition or another. This creates a system that fosters public corruption and ultimately mistrust, which itself is a threat to both the economy and democracy. Sullivan attempted to downplay this reality during his speech, telling the crowd at Brookings that Biden’s agenda isn’t about “picking winners and losers.” But a national industrial policy cannot avoid this.

For all of his populist platitudes, Biden’s intention is to develop a snare-tight relationship between government and industry. Last year, Biden’s Council of Economic Advisers wrote that the core aim of economic policy is to “restore the public sector as a partner in long-run growth.” If they build it, they can take it away. And if politicians in Washington can point to how successful they were in building an industry through subsidies, it makes it easier to argue for total control over that industry in the future. In the meantime, it allows them to continue to reinforce their coalition by trading subsidies for adherence to the rest of the political agenda.

Biden’s economic agenda rests on the belief that American prosperity was the result of decisions made by the state. As Sullivan argued, the government provides the “foundation for long-run growth” while businesses “innovate, scale, and compete.”

The advocates of industrial policy are wrong to consider the government, and not the private sector, as the engine for economic success. Economists have identified three necessary components to sustain long-run growth through the private sector: good institutions, a healthy culture, and technological change. Good institutions, such as the freedom to contract, allow people to do work that is best suited to their skills. A healthy culture celebrates entrepreneurs and creates an environment where people can maximize their own potential through free exchange with others. And the development of technology creates new forms of work, replaces labor-intensive and dangerous work, improves productivity, and increases the time available to do things besides work.

The American economic success story is inextricably linked to opportunities created by the private sector. The Biden administration, and other advocates of industrial policy, should ask how existing policies have limited or redirected economic gains away from the people it wants to help.

Unfortunately, this new industrial policy is founded on a failed model for a more inclusive growth that is bound to erode the institutions that we should all want to preserve.

Paul Winfree is a member of the AFP Advisory Council and author of A History (and Future) of the Budget Process in the United States (Palgrave Macmillan, 2019). He served as director of budget policy and deputy director of the White House Domestic Policy Council.