"Bloom vows to boost manufacturing," shouted the headline in the Detroit News last week. This should be significant, considering that Ron Bloom was tapped to be the senior counselor for manufacturing policy (aka, the manufacturing czar) by the president in early September. The article even observed that "Obama hopes to boost U.S. manufacturing through innovation and exports."
That is a worthy goal. And no doubt, U.S. manufacturers could use some assistance. Not only has the sector shed more than 2 million jobs since 2007, companies across virtually every industry saw business head over the cliff last year, with some firms seeing sales drop 40% or more from the year before. This should frighten any politician who truly cares about the long-term prospects for a strong economic recovery. As readers of this space know, I've preached long and hard about the importance of a strong manufacturing base. Without the R&D, the productivity, and the spillovers from manufacturing, it's far more difficult for a society to generate wealth and jobs.
But I have doubts about whether the Obama administration "gets it" when it comes to curing what ails American manufacturing. Our businesses were struggling to compete even before the recession struck. Why? Because doing business in this country is expensive, far more so than in Asia and in some ways more so than even in Europe. For example, our corporate tax system and legal system are more costly for businesses here than in Europe. Yet I haven't heard any talk of trying to make our corporate tax code more competitive, or of reducing friviolous and excessive tort costs. What is the administration's plan for luring innovators and R&D investment dollars to this country?
These are the larger issues that Czar Bloom has to worry about. For our part, NEMA sent Mr. Bloom recommendations to help jump-start the electrical industry. First and foremost was to:
"unlock the transmission corridors to accommodate efficient and effective distribution of energy from remote regions with excess supply to urban areas with excess demand. Many proposals to develop new transmission corridors are currently held up at the state and local levels. The administration could help to break through the numerous impasses among constituencies holding immovable not-in-my-back-yard positions by taking a strong leadership role, much as it has effectively taken with health insurance reform."
If the administration can use its influence to make it easier for electricity to flow, particularly from renewable energy sources to urban areas, then at least it will have laid the foundation for more green jobs and economic recovery.