[Greg]

I beleive that one one part of an economic stimulus program would be for the federal government to build and run some factories, at least for a limited time period.

One concern about the government printing and spending money is that it is inflationary. My view is that when the government prints and spends it pumps up demand for goods and services. If you have more demand chasing the same amount of goods and services you have inflation; however, if you have more demand chasing more goods and services you wouldn't necessarily have inflation. The government could thereby reduce unemployment and underemployment in a non-inflationary way buy printing and spending money and using that money to hire and pay people to produce goods in factories.

This could also go a very long way towards "green energy." The factories could build photovoltaic cells, mirrors for solar thermal electric plants, and windmills. They could also attempt a large pilot plant or two to see if mass production of lithium-ion batteries would reduce their production costs enough to make electric vehicles cost competitive with internal-combustion vehicles.

Once the economy recovers, the factories could be auctioned to private companies for private-sector production, similar to retooling factories during World War II that built tanks and fighter jets to build cars, TVs, and appliances.

[mgibbons19]

That way we could fix the auto industry problem at the same time as we fix the broader economy.

[Falconoffury]

It may be a good idea for the government to build renewable energy infrastructure for the long term. The free market does have difficulty seeing beyond the next quarter. I only hope they try to keep wages in line with what the free market pays for those jobs. If the government takes a free market approach to make-work programs, then they may not be as bad as some free market pundits claim. Offer the lowest wages that will fill the jobs and cause people to do their jobs properly. With the pool of labor growing, it shouldn't be too expensive for the government to accomplish some useful things. Of course there's theory and there's practice. The government will more likely pay union-sized wages and have one guy digging ditches while another one follows him to fill them up. The government isn't incapable of efficiently running make-work programs, but they have a poor track record of it.

[Tyler_JC]

I think a government-run factory would work about as well as a government-run art school.

Which model of wind turbine should be built? Who should we use as suppliers? What should the workers be paid? Who should we employ and do we have to follow a pre-set quota system?

Who can we sell to? Can we export these or do we have to keep them domestic?

There are literally hundreds of questions that would have to be answered by a government appointed committee before anything could be produced.

It might take years to go through all of the committee hearings. Each special interest group would demand something.

A government built and managed factory would be an utter disaster. For proof, see USSR (1917-1989), People's Republic of China (1946-1976), and North Korea (1953-Today).

The State is absolutely horrible at running businesses.

It would be much better economic policy to cut taxes on companies that produce goods in the United States. That would give them an incentive to keep production in the United States.

Just as an example, GM paid ~38 billion dollars in corporate income taxes in 2007. The company lost ~38 billion dollars that year.

If you had given them a tax holiday in 2007, they would be profitable! They wouldn't have had to fire anyone or shut any factories!

Just a thought...

[Greg]

It might take years to go through all of the committee hearings. Each special interest group would demand something.

It didn't take years after Pearl Harbor was bombed before the federal government was able to get the country to build a massive number of tanks and fighter jets.

[Tanada]

It might take years to go through all of the committee hearings. Each special interest group would demand something.

It didn't take years after Pearl Harbor was bombed before the federal government was able to get the country to build a massive number of tanks and fighter jets.

By and large in WW II the government said "We will pay X for Y number of tanks with Z specifications, anyone want the contract?" and then they contracted a private company to avctually manage the company and produce the tanks. Same thing for all the other things they built, bombers, fighters, rifles, helmets and on and on.

[Heineken]

I beleive that one one part of an economic stimulus program would be for the federal government to build and run some factories, at least for a limited time period.

The government does not understand "a limited time period." Once something like you're proposing becomes part of the government, it's forever.

[Ludi]

No. Means of production should remain in the hands of the people, in most cases.

In my opinion.

[patience]

Only the govt can take valuable commodities like high quality paper and ink, and make a near-worthless dollar out of them.

My wife works for the Census Bureau. Their idea of saving money was to "privatize" part of the work to private contractors, who sublet it BACK TO THE CENSUS BUREAU to do the actual work--at an added cost for the "private" outfit. Whose stock had suspicious connections to CONgress, of course.

If the govt takes over factories, GM and Chrysler will look like paragons of virtue in hindsight.

Oh. And the factories that built war materiel for WWII, were EXISTING, PROFITABLE companies, like Singer (sewing machines) who made .30 carbines. Govt only let the contracts.

I call BS on this one.

[gt1370a]

Sure! The government has done such a good job running the housing market (Fannie Mae and Freddie Mac) and the banking sector (Federal Reserve) why not let them manufacture everything as well! They're about to be providing us with our health care too. Let's just get it over with and nationalize everything, then the government can dictate prices and production levels for everything! That worked so well for the Soviets.

Aside from that, there are logistical problems with your proposal. First, the problem right now is deflation, caused by excess capacity. Having the government add more productive capacity would worsen the immediate problem. The gov is printing and spending right now because they WANT inflation.

[PrestonSturges]

It might take years to go through all of the committee hearings. Each special interest group would demand something.

It didn't take years after Pearl Harbor was bombed before the federal government was able to get the country to build a massive number of tanks and fighter jets.

By and large in WW II the government said "We will pay X for Y number of tanks with Z specifications, anyone want the contract?" and then they contracted a private company to avctually manage the company and produce the tanks. Same thing for all the other things they built, bombers, fighters, rifles, helmets and on and on.

Actually you are looking for the Defense Production Act.

http://en.wikipedia.org/wiki/Defense_Production_Act

The Defense Production Act (Pub.L. 81-774) is a United States law enacted on September 8, 1950, in response to the start of the Korean War. It was part of a broad civil defense and war mobilization effort in the context of the Cold War. Its implementing regulations, the Defense Priorities and Allocation System (DPAS), are located at 15 CFR §§700 to 700.93. The Act has been periodically reauthorized and amended, and remains in force as of 2007.

The Act contains three major sections. The first authorizes the President to require businesses to sign contracts or fulfill orders deemed necessary for national defense. The second authorizes the President to establish mechanisms (such as regulations, orders or agencies) to allocate materials, services and facilities to promote national defense. The third section authorizes the President to control the civilian economy so that scarce and/or critical materials necessary to the national defense effort are available for defense needs.[1]

[heroineworshipper]

Joseph Stalin did this in the 1940's. Your government could easily do it by selling bonds & pulling money out of the stock market because Oobs is the first leader to command complete control of hearts & minds since Hugo Chavez. Your government hasn't printed money yet. It's sold bonds at higher yields than what the stock market is offering, pulling money out of other industries & focusing it on the needs deemed centrally important for the common good.

Stalin wished he commanded as much unquestioned authority as Oobs. He had to resort to slavery to build towns in the Arctic circle & boost housing executives.

Americans would leap to buy bonds for a loss & pack themselves into North Dakota apartments at their leader's slightest twich.

[Denny]

Another great example of government ownership and control, more along the lines of American style technology and business practices would be the tarnished start called British Leyland. Formed out of many British auto companies in the 1970's, it went on to suck 18 billion pounds from the British governemtn and for what?

Here is an excerpt from Wikipedia:

"The company became an infamous monument to the industrial turmoil that plagued Britain in the 1970s. At its peak, BLMC owned nearly 40 different manufacturing plants across the country. Even before the merger BMH had included theoretically competing marques which were in fact selling substantially similar "badge engineered" cars. To this was added the competition from yet more, previously LMC marques. Rover competed with Jaguar at the expensive end of the market, and Triumph with its family cars and sports cars against Austin, Morris and MG. The result was a product range which was incoherent and full of duplication.

...

The company was now organised into the following four divisions[5]:

* Leyland Cars (later BL Cars) – the largest car manufacturer in the UK, employing some 128,000 people at 36 locations, and with a production capacity of one million vehicles per year.
* Leyland Truck and Bus – the largest commercial and passenger vehicle manufacturer in the UK, employing 31,000 people at 12 locations, producing 38,000 trucks, 8,000 buses (including a joint venture with the National Bus Company) and 19,000 tractors per year"

Just think of that first statement alone, concerning Leyland Cars. It took 128,000 employees to produce 1 million cars, and we are not talking the American style behemoths of the era but mostly econobox types. Do the arithmetic - 128,000 employees at roughly 1900 hours per year and that is around 240 hours labour per car produced!

Sorry, but best to keep government fingers out of factories.

[pedalling_faster]

one example of what you're talking about was an organization called Rome Air Defense Center. they did some very respectable military R&D in the pre-DARPA days. including some manufacturing.

my experience in modern day defense contractors is that many of the engineers are terrified of making anything. perhaps afraid they will tarnish their rep. by getting their hands dirty.

we used to have great manufacturing knowhow in this country. the government has to deal with the manager's & workers collective fear of the industrial arts.

part of the trick is to make "manufacturing engineer" and "manufacturing supervisor" and "worker" as respected as "supply chain manager", so that young engineers have the incentive to learn how to make stuff.

"supply chain manager" is one of those terms that goes along with outsourcing & off-shoring.

[canis_lupus]

Not a bad thought at first blush (instead of the govt printing money and sending it to banks where they sit on it, why don't they actually DO something) but as you can plainly see here, Greg, government -- capitalist, socialist, and communist -- has a crap record for running anything efficiently. Look at all the pork boondoggles, looting of Social Security, hundred thousand dollar toilet seats, etc. for good reasons why politicians and appointees should stay the hell out. What's that old expression ... a camel is a horse designed by government committee?

Here's another way of looking at it: if government employees were any good and saving money, running things efficiently and making a profit, they wouldn't be in government, would they? Instead they understand overspending money that isn't theirs, getting wrapped up in analysis paralysis, overpromising and underdelivering, and generally cocking up almost everything they touch that has your money involved.

Not a bad shot with the ol' noodle. What else do you have?

[manu]

It's time to let the factories close down. You can't eat nuts and bolts. Let back to the land. No time to waste. The next few months are really bad. Get ready, at least mentally.

[patience]

manu,
Yeah, the factories bear no resemblance now, to what they once were. Time to flush that and start over.

As to getting back to the land, that's where I started in life. Yes, you can eke out a living at it, but you'll work yer arse off to get it. And, yes, that's better than going hungry. But I don't see as much discussion as I'd like about the work involved in that sort of life.

pedalling_faster wrote:
"part of the trick is to make "manufacturing engineer" and "manufacturing supervisor" and "worker" as respected as "supply chain manager", so that young engineers have the incentive to learn how to make stuff."

I've seen that, too. It's a damned shame that these punks can't figure out that respect is something one must have for themselves. I've been an engineer, and called everything: Tool Designer, Product Designer, Process Engineer, Manufacturing Engineer, Machine Designer, and various unprintable stuff, too, mostly by managers without a clue as to how the factory floor really worked. But they kept paying me a great salary, because they knew that THEY could not make anything happen out there.

The youngsters need to learn a few things. 1), All power is assumed, not given. 2), It is easier and more productive to ask forgiveness for ignoring management, than to ask permission for something they did NOT think of. 3) Sales Dept. is NOT management, no matter that they think so, nor are they very often engineers. So don't take their word for anything. They are employed as effective liars. 4) Product function is far more important than specifications: "If it will reliably make the car go down the road, nobody asks stupid questions." 5) Budgets and timetables are fictions created by managers with nothing better to do, and in total ignorance of the facts. 6) You had better be right, when you are as cocksure as is needed to do the job.

There is more, but that will do to start. I don't see much of the above in today's crop of engineers. They can go cry in their beer until they figure it out.

Find people with the attributes I listed in govt at any level, and I will be REAL surpised.

[bratticus]

I think a government-run factory would work about as well as a government-run art school.

Hello? Art is whatever you can get away with.



========= Andy Warhol =========^

[shady28]

[
A government built and managed factory would be an utter disaster. For proof, see USSR (1917-1989), People's Republic of China (1946-1976), and North Korea (1953-Today).

The State is absolutely horrible at running businesses.

Actually, the USSR did extremely well directing industry in the first 40 years or so.


Keep in mind, this country went from an agrarian country to a superpower in 20 years. They were the first to develop an atomic bomb after the USA, and they launched the first space satellite. It was not until the late 1960s that it was apparent they were unable to keep up with western technology - 50 years after the revolution.

The problem ultimately is a human one - just as it is with capitalism. After a period of time, corruption and apathy seep in and eventually permeate all parts of the system. In their case, corruption permeated government. In our case, it permeates the financial and corporate strata.

http://www.answers.com/topic/soviet-industrialization

The industrialization of the Soviet Union proceeded at a rapid pace between the two World Wars, starting in 1929. Within an historically short period of twelve to fifteen years, an economically backward agrarian country achieved rapid economic growth, created a more modern industrial sector, and acquired new technologies that changed it from an agrarian to an industrial economy.

At the turn of the century Imperial Russia was lagging behind its neighbors to the west in practically all aspects of economic development.

[bratticus]

It was not until the late 1960s that it was apparent they were unable to keep up with western technology - 50 years after the revolution.

Was there a US education bubble that turned into a technology one later?