@kdboyce & Frank Eory: I don't think the proposed program is the whole story. The government expects the local investor groups and entrepreneurs to step up and share some of the risks. As much as I discourage the involvement of government in this, I think there is a role for it (like in China and India as some one already commented).
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Frank nailed it! As did Bert. Best approach would be to look at what obstacles to business and manufacturing growth here can be eliminated, then eliminate them. And don't avoid eliminating stuff just because they somehow were put there in the name of progress sometime in the past.
Trying to 'control' what goes where and why makes it too easy to scam the 'system'. There is an old saying: "The road to Hell is paved with good intentions". This is a road one should not be on.
Let me get this straight -- 12 manufacturing clusters and the cost of this program is $26M. If evenly divided, that's $2.17M per manufacturing cluster. Figuring it costs at least $250k to create a new manufacturing job, that's a whopping 8 or 9 new jobs per manufacturing cluster!
Better vet those applications thoroughly. Solyndra could've spent the whole $26M in less than a week.
I absolutely do not trust this administration to know where best to locate "manufacturing clusters," is the problem. They have already shown what their agenda is, in their attempts to dictate where Boeing might locate its plants, and all for political reasons.
In my view, the best tool the federal government has, to encourage manufacturing to be done here, is their tax policies. The rest is way too vulnerable to the shenanigans the overly activist government agency political appointees have already demonstrated they are capable of.
In this country, states vie (to different degrees) for businesses to locate there, by adjusting their local tax policies. Federal mandates on "clusters" would invalidate that approach, in favor of something that would very likely be far worse.
Let's leave that sort of nannie government behavior to political systems where the power flows from the government to the people. The opposite of here, one would hope.
The U.S. has been hemorrhaging manufacturing jobs for decades. It took the Obama administration several years to put together a plan to revive manufacturing. It has enlisted industry and university experts, including MIT President Susan Hockfield, to develop a coordinated plan to revive U.S. manufacturing and production. It's about time. We can quibble about whether the effort describe here is little more than an election year ploy (that's likely), but the fact remains that we need to find new ways to compete for value-added manufacturing. Whether it's flexible manufacturing, regional clusters or cloud-enhanced services, we need to get our ducks in a row and start competing again.
@Bert22306: Yes, it looks quite strange that government getting involved at this level. But sometime, this just act as catalyst and it may help US develop this this new value added production. It does work well in China and India.
This has the potential for being another Solyndra fiasco. Honestly, the federal government especially should stick with what it's responsible for, and should hesitate before mixing politics with complicated economic meddling. As this scheme will almost certainly be doing.
I think the best tool the government has, to encourage the economy to behave in particular ways, is to adjust its tax structure. One really drop-dead obvious example of that being, the payroll tax charged to companies, which obviously encourages companies to hire as few employees as possible. And I'm sure there are many similar examples of counterproductive taxes.
Is it just me who read this article, and thought he was reading about China?
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