Having failed miserably in its effort to shore-up U.S. manufacturing with trade protection, it now appears that the Bush administration is preparing to use direct government subsidies instead. Like the ill-fated steel tariffs, this effort, too, is doomed to failure.
As is so often the case, the Bush administration is approaching the alleged problem of manufacturing's decline as if no one had ever noticed it before. This results from the fact that administration initiatives are never studied or analyzed carefully before being announced. This is one area where former Treasury Secretary Paul O'Neill's criticism of the Bush administration is right on target.
If anyone had bothered to check, they would have found that the federal government has been issuing detailed reports on the demise of manufacturing for more than 20 years. In September 1980, the Carter administration put out a 2-inch thick report on the decline of American competitiveness. In 1985, the Reagan administration followed up with a 2-volume report of its own.
In addition, extensive studies have been done by the U.S. International Trade Commission, the National Research Council, the U.S. General Accounting Office, the Office of Technology Assessment, the Congressional Budget Office and others. I have a whole shelf of congressional hearings and committee reports, as well.
And then there are all the books. Some of the more notable are "The Deindustrialization of America" by Barry Bluestone and Bennett Harrison (1982), "Manufacturing Matters" by Stephen S. Cohen and John Zysman (1987) and "In Praise of Hard Industries" by Eamonn Fingleton (1999). The books by Laura Tyson and Robert Reich even got them CABINET appointments in the Clinton administration.
The point is that the ground was already well plowed before the Bush administration decided to turn its attention to the decline of manufacturing, which it did in a new report from the Commerce Department last week. Yet at the end of this exercise, the Bush administration could do no better than propose more taxpayer money to help private businesses do their jobs. According to press reports, the 2005 budget will propose substantially increasing spending for the Manufacturing Extension Partnership -- a program it proposed phasing out just last year.
Bruce Bartlett is a former senior fellow with the National Center for Policy Analysis of Dallas, Texas. Bartlett is a prolific author, having published over 900 articles in national publications, and prominent magazines and published four books, including Reaganomics: Supply-Side Economics in Action.
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