Carol Shea-Porter Has Yet Another Plan to Make Us Poorer

Factory for sale It's time once again to look at one of "Carol's Columns", the latest in a series of pieces from my own CongressCritter and perpetual toothache, Carol Shea-Porter (D-NH01).

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.

Carol's column appears at her government-provided website and residents of NH01 may see it at some point as an op-ed in their local papers. I am reproducing her entire column here, lest I be accused of quoting out of context. Carol's words are (appropriately) on the left with a lovely #EEFFFF background color; my comments are on the right.

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. 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.

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. 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.

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. 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.

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. 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.

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. 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.

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. 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".

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. 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.

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. 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?]

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. 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.

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. 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!

Last Modified 2013-06-19 9:41 AM EDT