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Alan Tonelson: Obama Manufacturing Plan Won't Create Jobs

Tuesday, 05 Jul 2011 09:02 AM

President Barack Obama's plans to create jobs by improving manufacturers' access to federal and university research resources won't make a dent in unemployment rates since it cannot make the U.S. more competitive, says Alan Tonelson, a research fellow at the U.S. Business and Industry Council.

The president wants to devote $500 million annually in federal and private sector funding to promoting advanced manufacturing.

While noble, it won't make a serious dent in the sector's $565 billion trade deficit.

"A CEO would never tell prospective investors, 'My firm is doing great; I'm losing market share to my competition.' But in a way, that is what Mr. Obama, the nation's CEO, has been suggesting with this and his other manufacturing initiatives," Tonelson writes in the Christian Science Monitor.

"According to his prescription, now that the auto sector has been rescued, America’s most valuable or promising industries need little more than limited doses of government-encouraged research and development and a 'greener' focus – along with a return to normal economic growth – to regain world-class status."

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President Barack Obama
(Getty Images photo)
What the government really needs to do is work to keep that research and development and production at home as well as deal with cheaper imports.

"Without this kind of overhaul, which Obama has so far resisted, American manufacturing can't be an engine of growth and will remain primarily an engine of imports, deficits, and debt."

Manufacturing, however, is picking up.

The Institute for Supply Management index of manufacturing activity rose to 55.3 in June, much better than many expected.

"This is additional evidence that the recent slowdown in economic activity was temporary," says Steven Wood, chief economist for Insight Economists, according to the Associated Press.

"However, the strength of the recovery is an open question given other factors."

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President Barack Obama's plans to create jobs by improving manufacturers' access to federal and university research resources won't make a dent in unemployment rates since it cannot make the U.S. more competitive, says Alan Tonelson, a research fellow at the U.S. Business...
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