Scott Paul, executive director of the Alliance for American Manufacturing (AAM), testified before the U.S. Congress Joint Economic Committee (JEC) about America's need for a national manufacturing strategy.
"Today's dearth of public policy to boost manufacturing is the exception, not the rule, dating all the way back to our Founding Fathers," Paul told the committee.
He emphasized that a manufacturing strategy is not a partisan issue, and pointed to two recent examples:
• "President Reagan - spurred on by a Democratic Congress - adopted a flurry of measures to counter a grossly imbalanced trade relationship with Europe and Japan in the 1980s," Paul said. "The Plaza Accords, which raised the value of currencies in Japan and Europe relative to the dollar in a managed way, had a positive effect in lowering our current account balance over time."
• "More recently, President Obama and Congress worked together to provide loans and the breathing space our domestic auto industry needed to rebuild, retool, and thrive," Paul said.
While that bipartisan program turned around the automotive industry, it was not the long-term plan that is needed to grow manufacturing in the United States.
Why is a National Manufacturing Strategy Needed?
"No matter how innovative or competitive individual manufacturers may be, there are some problems they simply cannot solve on their own," Paul told the committee. He pointed to several recent points from Jared Bernstein of the Center on Budget and Policy Priorities:
• R&D can be expensive, making profits hard to capture, such as in the development of advanced batteries.
• No one company has the capacity to coordinate projects on a national scale, like the smart grid or the internet.
• Outside assistance can be required for companies to successfully apply academic innovations to the production process.
• Manufacturers may face barriers when it comes to getting accessing credit for entry, expansion, and innovation.
• Manufacturers need export assistance and need help pushing back against unfair trade practices.
"The fate of the industrial sector of our economy is too important to be left to a gaggle of competing and ultimately unsatisfying theories of why it is declining in real employment terms, as a share of world output and exports, and as a percentage of our GDP," said Paul. “A national manufacturing strategy would give a significant boost to getting the government back on the side of America’s manufacturing workers and those companies seeking to expand domestic production in the United States.”
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