Web Letters: Who's Afraid of Industrial Policy?

By Max Fraser

This article appeared in the June 1, 2009 edition of The Nation.

May 13, 2009

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I agree with you that "in the end, whether or not the Big Three survive the crisis is less important than making sure that there will be an alternative for the millions of working Americans." As I pointed out on my blog at www.ProudlyMadeInAmerica.com, the problems with GM started at the top. It is awful that people like Rick Wagoner get to walk away with $100 million bonuses while the workers continue to lose benefits.

Besides the bad management, the big issue with the auto industry is that lack of demand. At some point the demand will pick up and jobs will be created. Due to the complexities of automobile manufacturing, many of the jobs will restored in the US. Unfortunately, there just will not be as many jobs as before.

I am not sure that the government could or should make a domestic manufacturing policy that would be effective. The government has a better chance to accomplish its goals through market incentives such as better tax credits for installing solar panels or buying an EV. If the government provides the right kind of incentives, the desired result of US manufacturing growth will happen, with the market picking the winning technologies and manufacturers.

In the end, if the new jobs wind up at a Toyota plant in Tennessee, a GM plant in Michigan, a wind turbine plant in Texas or a solar panel plant in Oregon, I am okay with that. As you stated, the goal should be decent manufacturing jobs.

Michael Scholnick

East Meadow, NY
05/15/2009 @ 12:11pm
Unfortunately, the history of "industrial policy" is twofold. First, it appears, governments pick losers like GM and Chrysler, which should never have gotten, and never are able to justify, their subsidies. Secondly, the recipients of the rathole money are taken over by the military.

While Obama seeks to put the green factor in place of the military, who knows how that will work out with the Terror Wars expanding into Pakistan?

Not knowing what things will look like, say, just four presidential elections from now, increasing government control may well move things in directions that Obama does not want to go.

Look how things have repeatedly flip-flopped every few elections in the last fifty years. That isn't likely to stop.

John D. Froelich

Upper Darby, PA
05/14/2009 @ 9:40pm

Web Letters: Who's Afraid of Industrial Policy?

By Max Fraser

May 13, 2009

East Meadow, NY

Upper Darby, PA

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