Trumpism failed manufacturing — Biden can build a legacy around it
Joe Biden is inching towards a new American industrial policy. That’s a good thing.
Consider what the new president has done so far and what he says he intends to do. In an executive order signed the day after his inauguration, he said his administration will expand the use of the Defense Production Act to quickly build COVID-19 medical supply production lines in the United States.
In another, he ordered a review of existing Buy American government procurement laws and proposed raising their compliance thresholds to ensure federal spending is boosting American industry. He committed to electrifying the federal vehicle fleet and ensuring it is made in the U.S. This is all before he’s expected to unveil a $2 trillion infrastructure and clean energy bill laden with commitments to domestic manufacturing.
These are signals of intent, meant to define political themes and priorities — and the details must be acted upon for these orders to be effective. But if he continues to pull the levers at his disposal, writes new rules and uses his authority to kickstart a genuine manufacturing reshoring effort, they could be the beginnings of a nascent industrial policy that will benefit the U.S. economy for years to come.
“I don’t buy for one second that the vitality of the American manufacturing is a thing of the past,” the president said before signing the Buy American order. “American manufacturing was the arsenal of democracy in World War II and it must be part of the engine of American prosperity now.”
Biden is as establishmentarian as they come. He spent years in the center of the political consensus that unfettered trade was the greatest engine for growth and that stimulus spending should be doled out only in measured doses. He was the vice president in an administration that adhered to that consensus before it was abruptly concluded by Trumpism — four years of haphazard economic nationalism that was in practice far more revanchist and corporatist than populist. Trump sold the politics of economic aggrievement with some success, but ultimately did nothing durable to lift the economic fortunes of the American working class.
Now Biden is president and he’s demonstrating some of the inherent political agility you need to get elected to the highest office in the land. His early steps suggest he recognizes that decades of laissez faire market worship angered the American electorate enough to elect a retrograde force like Trump and that four years of empty “America First” rhetoric have created an opening. Biden is signaling he wants to put the American worker first and he’s setting out to do the meaningful things that his predecessor didn’t bother to do.
It now requires follow through. At the end of this process that the Buy America order sets out, for example, we should have tightened our spending laws so that when we leverage public procurement markets we’re also investing in important manufacturing sectors and our manufacturing workforce. Couple this with trade enforcement and you’ll begin to see a revitalization of our domestic industrial ecosystem, which means more jobs that pay a premium wage available to American workers without a four-year degree. That’s an important framework to establish before we make large investments in infrastructure and clean energy.
This business should go to American firms and American workers. The policy will represent a new path forward for a modern presidency that’s not deregulatory, corporatist and “America First” on the one hand or cautious neoliberalism on the other.
This is hardly a done deal. While Biden’s established a rebirth of American manufacturing as an administration priority, it must be considered promising rhetoric until action is taken. And there are some big questions outstanding the president needs to answer, like: Will the investments in infrastructure be large enough to be transformational? Will this nascent industrial policy have the strength and durability It needs to attract new investment and rekindle supply chains for electric vehicle production, semiconductor chip fabrication or emerging battery technologies?
An industrial policy could turbocharge American manufacturing. Despite the pressures of globalization and automation and the presence of an overly strong dollar that dampened export performance, the sector added 1.4 million jobs between 2010 and 2020.
Imagine the possibilities if federal policies unleashed more innovation and growth. Remaking an American industrial policy could be one of Biden’s most unlikely accomplishments.
Scott Paul is president of the Alliance for American Manufacturing.
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