By Thomas Spoehr. Thomas W. Spoehr, a retired Army lieutenant general, is director of the Center for National Defense at The Heritage Foundation.
"Since President Donald Trump signed
an executive order last week to invoke the authorities in the Defense
Production Act for use in the coronavirus crisis, there has been a lot
of talk about what he should and should not do with these enhanced
powers.
The Defense Production Act allows the administration to prioritize
private sector contracts, reallocate raw materials, direct production of
desired goods, and even directly invest to increase production of
selected goods. It essentially allows the government to interfere in the
marketplace as needed to obtain materials essential to defense or
dealing with a national emergency.
Trump was right to invoke these authorities as no tool should go unconsidered during this period
But critics have begun to question why actions have not yet been
directed under the act. They want to see immediate orders going out from
the White House directing companies to change their production lines.
Some go so far as to propose conspiracy theories
that big business leaders have gone to the president to beg him not to
interfere with their lucrative business models and profits. Sen. Tammy
Baldwin, D-Wis., has even introduced legislation to force the administration to start using the law’s provisions.
But private industry already is responding to the needs of the
nation—voluntarily modifying its practices to meet America’s challenges.
It doesn’t need to be forced.
At a March 22 press conference,
White House adviser Peter Navarro described how executives from
Honeywell had reached out to offer assistance in making N95 masks, how
FedEx is making transportation happen, how Pernod Ricard offered to
start making hand sanitizer, and how other trade associations were
mobilizing their members to assist. General Electric voluntarily agreed
to ramp up production of critical ventilators.
Navarro described it as “the greatest mobilization in the industrial base since World War II.”
In the military, you quickly learn you get better outcomes
when you give a subordinate a goal and allow that person to figure out the best
way to accomplish it. We can force people to perform tasks against their will,
but that’s rarely the best option.
Nobody wants this crisis to end more than private industry.
Describing what the nation needs and allowing industry to self-select
what capabilities it can offer toward those requirements is a winning
strategy.
Similarly, companies are in the best position to assess how to
contribute to winning this war against COVID-19 and need the necessary
financing and the red tape cut.
At the same press conference, Trump said the threat of the Defense
Production Act was enough to provide great incentive for industry:
We have the threat of doing it, if
we need it. We may have to use it somewhere along the supply chain, in a
minor way. But we have millions of masks being done. We have
respirators. We have ventilators. We have a lot of things happening
right now.
The Defense Production Act is a powerful tool. It’s likely the
administration will need to use it at some juncture, maybe soon, to
breakthrough some logjam, or to provide money to a company so it can
increase production capacity. Figuring out those needs is not an
overnight endeavor.
In the meantime, the administration is right to identify the needs,
coordinate with industry, provide it with the resources and permissions,
then get out of the way so that it can produce what the nation needs."
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