The Beginning of a Manufacturing Policy

American Machinist (Freedenberg) - The Obama December framework is too extensive to cover all of its recommendations, but here are some of better ideas that it puts forward: provide workers with the opportunity to obtain the skills necessary to be highly productive; invest in new technologies and business practices; develop stable and efficient capital markets for business investment; ensure foreign market access and a level playing field; improve the general business climate, especially for manufacturing.

If there is sufficient investment in job training and community colleges; if there is enough money put into both basic research and manufacturing-related R&D grants, including a number of R&D programs that already exist but are under-funded; if the financial system can be made healthy again and government programs such as the Small Business Administration and the Export-Import bank can be sufficiently staffed and funded; if there is a robust effort made to open foreign markets and punish or negotiate an end to unfair trade practices by our trade partners, including particularly the Chinese; and if the administration is willing to review its regulations and tax policies and, indeed, reform them in a way that would eliminate the 18-percent penalty that MAPI (the Manufacturers Alliance) estimates that U.S. businesses operate under when they attempt to compete in the international marketplace; then I would be optimistic that this latest attempt to adopt a pro-manufacturing strategy might just have a positive impact, resulting in the creation of new, high-paying jobs in competitive factories...



Of course there are many obstacles to revitalizing manufacturing. There is also pending legislation, such as Healthcare Reform and Cap and Trade, which are likely to raise costs for U.S. manufacturing. Nevertheless, if a robust effort is undertaken to promote the policies described in the Obama framework, the result could bear fruit and help to offset some of the new costs. What would be particularly helpful would be efforts to revitalize the credit system, which has forced many companies to close their doors even though they have orders on their books and business on the floor. Tax incentives for R&D and a faster system for getting government grants to innovative companies could make a difference between capturing new markets or losing out to subsidized foreign competitors. Finally, if the administration is as serious about revitalizing manufacturing as it claims, it has to convince Congress to keep taxes down and incentives to invest up.