Private Industry Mobilizes Against the Coronavirus The feds don’t need to nationalize the economy to fight Covid-19.
https://www.wsj.com/articles/private-industry-mobilizes-against-the-coronavirus-11585091775?mod=opinion_lead_pos2
President Trump can’t do right by some critics no matter what he does. For three years he’s been denounced as a reckless authoritarian, and now he’s attacked for not being authoritarian enough by refusing to commandeer American industry. The truth is that private industry is responding to the coronavirus without command and control by the federal government.
Last week Mr. Trump invoked the 1950 Defense Production Act that lets a President during a national emergency order business to manufacture products for national defense, set wage and price controls and allocate materials. On Tuesday the Federal Emergency Management Agency used the Korean War-era law for the first time in this crisis to procure and distribute testing kits and face masks.
But Democrats want the Administration to take over much more of the private economy. New York Gov. Andrew Cuomo on Sunday tweeted that the federal government should “nationalize the medical supply chain” and “order companies to make gowns, masks and gloves.” He has been echoed by Democratic governors and leaders in Congress.
Yet businesses across America are already chipping in where they can. Aerospace manufacturer Honeywell plans to hire 500 workers at its plant in Rhode Island, which currently produces safety goggles, to make millions of N95 face masks for medical professionals. 3M has doubled its global output of N95 masks and this week is sending 500,000 respirators to hot spots in the U.S.
Corporations including Apple, Facebook, Tesla and Goldman Sachs are donating millions of medical masks stockpiled for wildfires or a biochemical attack. Apparel manufacturers are repurposing textile mills to produce personal protective equipment. Hanes plans to manufacture masks using U.S. cotton at factories in El Salvador, Honduras and the Dominican Republic. Diverse supply chains can help businesses operate more flexibly during a crisis since they don’t depend on any single country for materials or workers. That’s why an America first or America only government supply order would be a mistake.
Maine-based Puritan Medical Products, one of America’s top sources for nose swabs, says it has been rushing to keep up with orders even as some workers have become sick. Directing the company to produce more coronavirus swabs won’t do any good if it can’t get more workers and could create a shortage of flu tests if it has to divert resources from other lines.
Businesses know their workforce capacities and supply chains better than the government—and how to retool them to maximize efficiency. Dozens of breweries and distillers including Anheuser-Busch and Pernod Ricard USA are churning out hand sanitizer. General Electric plans to hire more workers to produce ventilators even while it lays off thousands in aviation. Fuel cell manufacturer Bloom Energy is retrofitting hundreds of old ventilators for the state of California.
Ford said on Tuesday that it would start assembling plastic face shields and work with 3M and GE to make respirators and ventilators. General Motors is also exploring how to use its global automotive supply chain to make ventilators. Ford’s CEO said its ventilators could be available by June, and it isn’t obvious that a government takeover of manufacturing would speed this up.
It might make sense for the federal government to purchase supplies from manufacturers and then allocate them to hospitals and states with the highest need. But it doesn’t make sense to order manufacturers like Apple or GM to make nose swabs or chemical reagents for testing kits if they don’t have the expertise or suppliers to do so.
The U.S. Army Corps of Engineers can also help convert vacant hotels and college dorms into make-shift hospitals, as it is doing in New York. When this pandemic is over, one of the lessons is likely to be that the government should have done more earlier to purchase and surge medical equipment to hospitals.
But dictating to businesses now will lead to bureaucratic snafus and inefficiencies. President Trump said Sunday “we’re a country not based on nationalizing our business.” That’s the right impulse. America needs to emerge from this with a private economy intact and ready to grow again, not nationalized industries subject to bureaucratic and political control.
Comments are closed.
