This time around, Carol's column is titled is "Make It In America". To
put the most positive spin on it: it's about revitalizing the USA's
manufacturing sector. Carol's for that. Yay!
But, in reality, her column
is yet another incoherent mess, full of fallacies,
economic illiteracy, and bad policy proposals. Carol is, as always,
and despite all evidence to the contrary,
devoted to her core belief that a Government Fist (when wielded by
Democrats, anyway) can produce
better results than the free market's Invisible Hand.
Bushwa. But let's look in detail.
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When I talk to constituents in New Hampshire's First
District, I find that while there are many issues dividing our
residents politically, there is one issue that always creates the
same response. Manufacturing. They want to see the companies who left
America return. They want to see the label "Made in America" again. It
is a matter of pride as well as jobs, and they want Congress to help
make that happen.
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Note the interesting
word choice: she talks "to" constituents. God forbid she
should talk "with" them. Let alone listen to them. No, she just
talks "to", then observes the "response" her words have "created".
Pavlov, call off your dogs!
This is why I believe Carol writes these columns herself. Even
a novice professional writer would have noticed the implicit
arrogance and rewritten this paragraph.
But, even though
Carol is notoriously
shy about unscripted, unmanaged interactions with constituents,
let's grant the premise that it happens. I don't actually disbelieve
that people generally have a warm-and-fuzzy feeling about
"manufacturing", and can nod in agreement tnat making useful products
out of raw materials is an honorable trade. Should government "do
something" to encourage that? Uh, sure. As long as things
stay vague and there are no messy details about competence, costs,
and trade-offs.
And then Carol's constituents
get into their Hondas and Subarus, and drive
away hoping they didn't
upset the crazy lady.
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I share that opinion. I worked my way
through college with factory jobs. They paid better than most other
local jobs at that time, and there was more overtime. Now, when I shop,
I think about the good people I worked with. Those factories are long
gone. But there are still others making American products, and I try to
keep those employees working by buying American-made products.
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Nostalgia is OK, as far as it goes.
When it morphs into the mild xenophobia Carol displays here,
it might be a little unpleasant, but as long as she's spending her own
money, it's not worth making a big deal about it.
Except… hey, Carol, shouldn't you
be looking to buy New Hampshire Congressional District One-made
products? I mean, if you're going to champion economic isolationism,
why not go all the way, to the benefit of people who really
deserve it, your constituents?
Because, of course, drawing your red-line zone of economic protection
around NH01 would be self-evidently silly.
Drawing
it around the USA is
equally silly, but it plays better with people who don't think
about such things too much.
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Three recent purchases show the challenges we face. I needed dishes
and I wanted American-made. I spent several hours looking, but finally
found an American company. However, I could not find American-made
every-day silverware. Next, I went to a number of stores looking for an
American-made pocketbook. There weren't any. One of our local chain
stores had one. Just one. Eventually, I gave up and looked on-line
for American-made brands. I did find an American product, but it was
far harder than it should be. The last example was furniture. There
were only a few American-made pieces every place I looked. It took me a
few weeks, but I found a couch made in North Carolina. There was a time
when all of these purchases could have been made in just one afternoon,
but now we struggle to find American brands in our retail stores. This
is just wrong.
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As long as Carol is spending her own money on her buy-American
quest, I can't gripe much. Even though it's probably her Congressional
salary, straight out of taxpayer pockets, I won't begrudge.
And the time she spends wandering the stores and websites? You might
say that she doesn't value those hours very highly.
I say, on the other hand, that the time she spends shopping
is time she doesn't spend on her job; that is, on average,
almost certainly a plus for the country.
But that reminds me that, unfortunately, Carol Shea-Porter is not
just another shopper wasting time and money on irrational preferences
based in sloppy thinking and economic illusions.
She's perfectly willing to translate those preferences into wacky
legislation that will make us, on average, worse off.
This is just wrong.
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When I was a child, an article made abroad
caught my attention, because it was unusual. Now, American-made labels
catch my eye. There is a long list of reasons for this--mistakes made in
trade policies sit at the top in my opinion--but we now need to try to
reverse this. I believe we can bring good jobs back home and see that
label again, but we need a plan.
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More nostalgia… Why aren't things like they were in the 50s?
It would be sweetly pathetic, if it weren't coming from someone in
power; instead it's sad and dangerous. As David Harsanyi
observed, this push is ironically reactionary for people who like to
bill themselves as "progressive". Hey kids, let's get back those jobs that
decades of progress and prosperity have left behind!
Carol says "we need a plan". Which is nothing new: people have been
demanding that sort of thing for centuries. Instead of hundreds
of
millions
of private citizens deciding on their own
what they want to produce and consume, figuring out
how they want to allocate their scarce resources to accomplish that, and
entering into mutually voluntary agreements to implement their
schemes…
Why, we'll just ("democratically") decide all that stuff in Washington:
figure out what people need, figure out who's going to produce it, and
just make it happen!
As I said: bushwa. Dangerous bushwa. People have written
books debunking this pernicious notion
that central planners can do a better job of producing economic
prosperity than private citizens operating in the free market
under general rules. It just doesn't work.
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I was an original member
of the "Make it in America Working Group" that Congressman Steny Hoyer
launched a few years ago. I have rejoined the group, and we are working
to pass legislation that will support American manufacturers.
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There are, of course, probably tens of thousands of American
entrepreneurs who would dearly love to make a profit producing things
in America, if it were at all possible. Those people don't need legislative
"support"; they need government at all levels to get out of the
way.
Of course, on the other hand:
there are always industries that welcome government
"support". Typically entrenched enterprises with plenty of political
pull, the "support" they receive allows them
to—literally—engage in "business as usual", without worrying
overmuch about competition from companies that government has decided
not to "support". Result: inefficient bloat, and
higher prices for unlucky consumers.
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The Make it in America plan has four major parts. First, we need a
national manufacturing strategy. Other countries have highly developed
strategies that offer tax incentives, support for infrastructure
projects, investments in research, etc. It is time for America to do
the same.
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You would not know from Carol's column that the USA is one of the
top two manufacturing countries in the world, the other one being
China. Some sources have the US slightly ahead of
China, some behind. But nobody else is even close,
and nobody else shows any signs of getting close.
So those "other countries" with "highly developed strategies"?
They ain't working.
What has happened: manufacturing's share of the US GDP has
declined. That furrows some brows, but it mostly means that other
sectors are growing more quickly.
In addition, the number of US workers employed in manufacturing
has shrunk. While China produces its manufacturing output with
a workforce
of around 100 million souls, the US does it with around 12 million.
That's a feature attesting to the insanely high productivity of US
manufacturing workers. It's a good thing. But for Carol and her ilk,
it's a bug that needs to be "fixed".
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Second, we need to increase exports. There are
a number of barriers holding companies back from global markets. We
need enforcement of fair trade laws, and we need to help our businesses
navigate through the maze of rules and regulations here and abroad.
Other
countries are far more aggressive in helping their businesses access
foreign markets. American businesses also need better communication,
road, and rail infrastructure to compete on equal footing.
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One slightly amusing thing: Carol's just spent a couple
paragraphs telling us how diligently she
tries to avoid buying other countries' exports.
But she wants those
other countries to buy more
US exports. Carol wants those furriners to
do as she says, not as she does.
The US, according to Wikipedia,
is the third-largest exporting country in the world, slightly behind Germany.
(Both more-than-slightly behind China.)
Could it do "better"? Well, probably. Do I trust Steny Hoyer and Carol
Shea-Porter to know what the "right" level of
exports is, and how to make that happen? When they don't seem to
know the meaning of the phrase "get out of the way"?
No.
Instead, let's let companies that can profit by increasing
exports figure out how to do that; they have every incentive
to do so without the "help" of government.
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The
Make It In America plan also encourages businesses to return. Currently,
there is a bill to eliminate the tax deduction for moving expenses for
companies that send jobs abroad and to offer a tax credit to them if
they
bring jobs back. There is also a bill that gives companies preference in
government contracting and a 5% reduction in taxable income if they make
at least 90% of their goods and services in America, and that pays at
least 70% of an employee's health insurance costs. There are many other
bills that offer help to companies as well.
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The funny thing here is: Carol's immediately
previous
column was all about extracting more taxes from the private
sector. Carol specifically trashed General Electric (a manufacturing
company),
for making creative use of existing
loopholes in the tax code to minimize the government bite.
Close them loopholes and get companies like GE to cough up big time!
But that was April, this is May, and suddenly Carol is all about
offering more tax gimmicks and loopholes to get companies to behave
the way she wants.
Were I the CEO of GE, I wouldn't know which way to bet.
[BTW: A year ago I compiled a short list
of Democratic candidates' promises to do away with "tax breaks for
companies that ship American jobs overseas"; it's something they've
been promising for over 20 years. They are remarkably slow
at figuring out how to make it happen. Do you think that might be
because it's a far better demagogic campaign promise than sound policy?]
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The fourth part of
the plan is to train and secure a twenty-first century workforce. We
need
to compete in a world market. Therefore, our students need top skills
and education. The plan calls for all stakeholders--the government,
educational institutions, and private industry--to work together to
prepare students. One proposed bill would give a tax credit to
businesses
that offer apprenticeships and then keep the employee on the payroll for
at least two years after the training.
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The implicit admission here is: government schools have been doing a
lousy job of their appointed task to
"train and secure a twenty-first century workforce."
Do you think that Steny and Carol have suddenly figured out how to
make that happen? Me neither. I think it's just another excuse to
shove more money at schools.
And there's
another stupid tax loophole. Please: if it makes economic sense
for companies to offer "apprenticeships", they can and
should do it on their own.
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Americans are ready
to move on this agenda. Make It In America sounds right and feels right
because it is right. Congress might not be leading on this, but they
could at least follow their constituents and start putting Make It In
America bills on the floor.
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Or, alternatively, start putting Make It In America bills in the handy
recycling bins just outside the door. Government has spectacularly
mismanaged itself for years; if it were a business, it would be
out of business. And now they want to help manufacturers?
Aieee, run away!
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