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Wednesday, December 16, 2009

Guest Column

Dear Readers:

When I find a column that I think is both informative and timely, I try to make sure that it's here where y'all can read it. This one is really thought-provoking, and it's a terrific idea as well, one whose time is NOW, and not sometime in the future. Please read this and pass it on!

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Why Not 'Cash For U.S. Jobs'?

By Isaiah J. Poole
December 15, 2009 - 10:56am ET

The last time I made a trip to Home Depot was for a space heater for my bedroom, and I did what I suspect many people are doing on purchases like this: In addition to comparing the price tags, looking for the "Energy Star" label and asking whether this heater is any better than the one that's now on its way to its eternal home, I looked to see if any of the products had the "Made in the U.S.A." label.

Unfortunately, none did, and I can't say I was surprised.

And there lies a major flaw in President Obama's trip to a Home Depot in a Washington suburb today to tout his "cash for caulkers" program. It is a well-intentioned program to get people to invest in making their homes more energy efficient, and in the process getting more dollars flowing through the economy. But, as the Alliance for American Manufacturing notes in its statement today, what's missing is a stimulus for American manufacturing and the jobs in that sector.

If the federal government provides homeowners with incentives to purchase products stamped "Made in Mexico" or "Made in Japan" or "Made in China," will factories workers in America be called back to work? In most cases, energy-efficient appliances and retrofitting products manufactured overseas do not rely on American-made steel, rubber, glass, and other key inputs.
Recently, AAM took
a more detailed survey of a Home Depot to get a sense of just how much benefit the economy would actually get as a typical homeowner uses the "cash for caulkers" credit to retrofit their home.

We were glad to see that some products are made in America, including:
• DAP caulks and sealants

• Certainteed and Owens Corning insulation
• GAF ventilation systems

Unfortunately, many of the high-value energy efficiency products we saw were not made in America. Several hot water heaters were stamped “Made in Mexico” and “Made in Japan.” Most fluorescent bulbs we saw were “Made in China”.

In a separate post, our research director Eric Lotke points out the other side of today's good news about an increase in capacity utilization at our nation's factories—that we still have more than a quarter of our manufacturing capacity lying idle.

AAM cites one piece of good breaking news, General Electric's announcement that it is planning to make a new line of energy-efficient washers and dryers at a Louisville plant that will employ 400 workers. But we need a lot more companies stepping up to the plate.

It's one reason why President Obama's jawboning of the banks—however unnecessary it should have been if the government bailout of the financial sector had been handled properly in the first place—was an important step in what should be a comprehensive policy to restore manufacturing to its rightful place in the economy. Banks have an obligation to invest prudently but aggressively in the firms that can get those factories humming again. If these firms are producing the goods needed in the new green economy, then a "cash for caulkers" program will not just be a boon for the big-box hardware chains and for homeowners who shave a few dollars of their utility bills, but they will get a skilled American worker off the unemployment line and into a good-paying job. That is a smart taxpayer, and consumer, investment.
America's Future or Institute for America's Future

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