Making Manufacturing A Priority - by Jerry Jasinowski
President-elect Trump is taking it from all sides about his intervention with Carrier to keep 800 jobs in Indiana. Bernie Sanders says it will encourage other companies to threaten to leave to extort more tax benefits, and the Wall Street Journal opines that Trump's mercantilist trade policy will jeopardize exports, threatening more jobs than this act will save. Conservatives fear this action smacks of dreaded industrial policy.
These critics miss the much larger symbolic statement that Trump is making in the Carrier initiative. For 20 years we have stood idly by while our competitors devoured major sectors of our manufacturing base employing all manner of predatory trade practices - discrimination against our exports, subsidizing their domestic industries, and perhaps worst of all - manipulating their currency. Small manufacturers complained justly that China was selling finished products in this country for less than it cost them to pay for raw materials.
While this was going on, our government looked the other way. Twice a year, the U.S Treasury Department decreed that China was not manipulating its currency - calling to mind Chico Marx's famous line, "Who you gonna believe, me or your eyes?" It was all part of a conscious decision to sacrifice manufacturing to larger geopolitical concerns. Thus, some 5.7 million manufacturing jobs that once empowered people with modest education disappeared.
I am well aware that Trump's deal with Carrier in and of itself amounts to little more than a drop in the bucket, and that an ad hoc response to specific corporate situations does not constitute a policy shift. It will not stem the tide of job erosion. But this gesture offers reason to hope we are on the threshold of a long-overdue sea change in our government's hands-off attitude toward the continuing assault on our manufacturing base. Manufacturing was and remains the primary engine of our economy, accounting for the lion's share of R&D, supporting millions of good jobs, and critical to our national defense.
We should also appreciate the extent to which Trump's action challenges the obsession of Wall Street and policy makers with maximizing shareholder value. We need to take a broader view of the vital role of business in society. Profits are important; so are people.
It is high time our government gave manufacturing its due and made it a top national priority. If the new President can set a tone - that manufacturing is vital to our nation - it will foster a variety of policies that will make a big difference over the long haul. Now President-elect Trump needs to put together a manufacturing agenda that fulfills the promise of making manufacturing a priority, including cutting corporate taxes to encourage capital investment and R&D, a tough trade policy that also encourages manufacturing exports, a national skills training program that will attract bright young people to manufacturing, infrastructure modernization, and other programs that support "Buy American" and reshoring initiatives in the private sector.
We can only hope that this symbolic action with Carrier that makes manufacturing a priority is the first step in a coherent manufacturing policy that keeps U.S. manufacturing strong and helps keep manufacturing jobs in the U.S.
Jerry Jasinowski, an economist and author, served as President of the National Association of Manufacturers for 14 years and later The Manufacturing Institute. You can quote from this with attribution. Let me know if you would like to speak with Jerry. December 2016