“Do Manufacturers Need Special Treatment?” — They Both Need It and Deserve It

News

“Do Manufacturers Need Special Treatment?” — They Both Need It and Deserve It

Huffington Post — In one of the most uninformed — and counter-productive — op-eds we’ve read in the last five years, President Barack Obama’s first chairwoman of the Council of Economic Advisors, Christina D. Romer, just spent 1,200 words arguing that we should do nothing about the crisis in American manufacturing. She meticulously constructed three straw men — market failures, jobs and income distribution — and then proceeded to knock the stuffing out of each of them.

It was a heroic, if not faintly humorous, performance given Ms. Romer’s recent position in the administration and the fact that few others in the country misread more the depth and the duration of the still largely ongoing Great Recession of 2007. She was an architect of the administration’s stimulus package, its auto bailout, and its policies that led to the “green shoots” and “recovery summer” fiascos. But none of that stopped her from eviscerating arguments meant to do something about the crisis in manufacturing.

Ms. Romer concluded her op-ed by admitting that manufacturing was “the engine of growth that allowed us to win two world wars and provide millions of families with a ticket to the middle class.” And yet she felt that public policy regarding manufacturing should be “based on hard evidence of market failures, and reliable data on the proposals’ impact on jobs and income inequality”, for which, in her opinion, “a persuasive case for a manufacturing policy remains to be made.”

President Harry Truman, in a moment of sheer frustration, demanded a one-armed economist. He had grown tired of dismal scientists telling him “on the one hand, we should do this. On the other hand, we should do that.” He had a point.

Read the whole article »