New Manufacturing Czar Should Head Off Unwise Policies

The best thing President Barack Obama's new manufacturing czar, Ron Bloom, can do for his besieged sector of the economy is advise the administration of the unintended and sometimes destructive costs of some government policies on the production of goods.

The picture is grim for those in the business of making things, as any resident of Michigan knows. In August, the economy had 11.8 million manufacturing jobs, down from 17.2 million in 2000. In that period, total manufacturing jobs declined by nearly one-third.

In this state, the decline in manufacturing over the same period has been even greater, nearly 50 percent, to about 454,000 jobs from 900,000 in 2000, largely as a result of the implosion of the domestic auto industry.

Bloom clearly has his work cut out for him.

He will retain his assignment as head of the president's auto task force, but will now also advise the administration on ways to help the manufacturing sector in general.

This is a smart move by the Obama administration. Production needs a voice, and Bloom, a former special adviser to the steelworkers union, will now report to one of the president's top economic advisers, Lawrence Summers.

There are many examples where Congress has had a tin ear on manufacturing. One instance is its law that effectively outlaws incandescent light bulbs, with a phase-out period that will end in 2014.

Congress didn't let consumers make the trade-off decision for themselves between the increased efficiency of fluorescent light bulbs and their higher costs and mercury content.

As a result, General Electric is shuttering light bulb plants in Virginia, Kentucky and Ohio, sending 400 jobs offshore.

A current example of where the input of a manufacturing czar would be helpful would be in the crafting of regulations to accompany an administration policy that all auto fleets will have to have an average fuel efficiency of 35.5 miles per gallon by 2016.

The News reported Tuesday that there is a possibility that the regulations will be more lenient on brands that sell less than 400,000 vehicles annually, which could include such luxury nameplates as Mercedes-Benz and BMW as well as some low-volume South Korean and Japanese products.

This, of course, would put domestic firms at a competitive disadvantage.

Finally, one of the biggest threats to manufacturing is U.S. House legislation that would impose a cap-and-trade regime on carbon emissions and require manufacturers, among others, to use more costly forms of energy. The National Association of Manufacturers contends that the legislation would cost the economy $3.1 trillion between 2012 and 2030 and result in the loss of 2.4 million jobs, with the majority in the manufacturing sector.

The U.S. Energy Information Administration is less gloomy, but it estimates the legislation's cost to the nation's gross domestic output at .03 percent by 2030, which, given the nation's $14 trillion economy, still amounts to a loss of billions of dollars.

If Bloom can help the Obama administration focus on these costs and fix counterproductive policies, he will serve the government and the nation well.

REPRINTED FROM THE DETROIT NEWS

DISTRIBUTED BY CREATORS.COM