Government Intervention in Manufacturing

Included in the massive omnibus spending bill passed by Congress in December was the Revitalize American Manufacturing and Innovation (RAMI) Act. The bill gives the Commerce Department authority to establish networks of manufacturing innovation centers across the country.

Writing at Real Clear Policy, Thomas A. Hemphill, NCPA senior fellow and professor at the University of Michigan-Flint School of Management, explains the centers:

– The Department of Commerce can appropriate $5 million each year for administrative expenses for the centers for 10 years, and the Secretary of Energy can transfer $250 million over a decade to match state and private funding for the centers.
– Each center will have a specific, manufacturing-related focus, such as a new process or a new material.
– Federal funding for each center will begin decreasing after two years of funding and will disappear after seven years. However, Hemphill notes there are that allow the Commerce Department to alter funding for the centers.

While promoting manufacturing has bipartisan support, Hemphill says the bill tilts the playing field in favor of the technologies the government decides to promote, moving away from policies that simply set ground rules that allow for industrial innovation and moving towards government intervention in the manufacturing sector.

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