President Obama on Friday announced a new $500 million manufacturing initiative.
In a speech at Carnegie Mellon University, he launched the Advanced Manufacturing Partnership, "a national effort to bring together industry, universities, and the federal government to invest in the emerging technologies that will create high quality manufacturing jobs and enhance our global competitiveness," as described by the White House.
This is the administration's second manufacturing-focused plan this month. At the beginning of June, President Obama moved to expand the "industry-led worker-training program" Skill for America's Future, reports The Hill.
These programs have undoubtedly been established to help achieve Obama's lofty goal of creating 2 million jobs by doubling exports by 2015.
But a new report by the U.S. Business Industry Council, titled "High Import Penetration Keeps Growth and Hiring Down," asserts that the country's chief executive is "missing a big opportunity to speed up economic recovery by limiting his trade-related growth initiatives to boosting U.S. exports". The report makes the case that the gains possible from better import controls would have a much greater effect on the economy.
Alan Tonelson, research fellow at the USBIC and author of the report, joined Aaron and Henry to discuss the President's new half-billion dollar push to rebuild America's wilted manufacturing base.
"This new policy initiative is not only sorely inadequate in terms of the scale of the problem," he says, referring to the $700 billion manufacturing trade deficit. "But, much of this is beside the point because the President keeps ignoring…the big issue that is facing America's domestic manufacturing base: It is being forced to compete in a world full of markets that are rigged against it."
Tonelson, also the author of Race to the Bottom, says what this country needs is "outside the box thinking," including enacting tariffs on foreign-made goods.
"American trade policy has to get smart, it has to get tough and it has to be maybe a little bit ruthless [and] it has to go into an eye for an eye mode," he says.
Opponents of such trade barriers say this would cause the price of many imported goods to rise substantially; Tonelson does not agree.
"Economics teaches us that if the price differential is that great, and in many instances it surely is, then bringing the work back home will create more employment back home at higher wages," he says. "Should we keep on focusing on giving American consumers cheap goods which they often can't pay for anyway because they do have not jobs? Or should we focus on creating more and higher-wage employment at home? Restricting imports will give you that latter result."
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