I tend to think that politicians are corrupt until they prove me different. They formulate policy based on the desires of those who help them get elected. That explains most policy decisions. Democrats tend to favor policies that benefit unions because unions are big campaign contributors. Republicans tend to favor policies that conform to the desires of the Christian right because they are campaign contributors and they vote in a block for Republicans. In a way it is comforting to think about things this way because many times the alternative is that the politician(s) in question are just plain stupid. Just such a policy is at the center of a Democratic plan to “revive” manufacturing (via WaPo):
President Obama and congressional Democrats — out of options for another quick shot of stimulus spending to revive the sluggish economy — are shifting toward a longer-term strategy that promises to tackle persistently high unemployment by engineering a renaissance in American manufacturing.
That approach, heralded by Obama last week in Detroit and sketched out in a memo to House Democrats as they headed home for the August break, is still evolving and so far focuses primarily on raising taxes on multinational corporations that Democrats accuse of shipping jobs overseas.
There are lots of reasons for the decline in manufacturing jobs in the US and none of them have to do with paying too little in taxes on overseas profits. One has to have a particularly strange view of economics to believe that raising taxes on corporations will encourage them to hire more Americans. Manufacturing jobs are declining in the US for the same reason they are declining all around the world – rising productivity. And oh by the way, the US is the largest manufacturing economy in the world by a pretty wide margin. Democrats believe contrary to all economic research that the US economy would be better off if we used more people to do it. Maybe we should outlaw the use of tractors so we can get back all those farm jobs that have been lost over the last century.
Will Democrats seek also to tax, say, shipping containers? Over the past half-century, these humble boxes have put millions of high-paid longshoremen out of work. Perhaps the Democrats will tax also high-grade rubber tires: by enabling cars and trucks to travel farther on single sets of tires, the number of jobs in tire-manufacturing plants is reduced. Or maybe TeamObama will slap a punitive tax on electrical generators, for ready access to inexpensive electricity continues to encourage businesses to lower their costs by replacing human labor with machines.
The possibilities to spark the kind of economic “renaissance” envisioned by Mr. Obama and friends are endless.