Ok, short thread on the Defense Production Act and how it could (and should) be used in this crisis.
There is a lot of confusion out there and we need clarity.
There is a lot of confusion out there and we need clarity.
I wrote a bit about the history of the DPA and American mobilization for emergencies here: washingtonpost.com/outlook/2020/0…
And was quoted in this piece about the DPA here: npr.org/2020/03/25/821…
Trump is defending his refusal to invoke the act by using bizarre Red Scare tactics and raising the bogeyman of socialism and nationalization: vox.com/2020/3/23/2119…
THIS IS NOT HOW THE ACT WOULD USEFULLY BE USED RIGHT NOW.
The whole point of the DPA is to give the president power & flexibility to ensure that critical material needs are met in emergencies. Initially, this meant military emergencies, and it was based on the experience of WWII mobilization and developed in the context of the Cold War.
We are in such an emergency. Hospitals and states are competing with each other for essential medical supplies–competition the president has perversely encouraged. Hospitals (as in NYC) lack supplies; hospitals elsewhere may be hoarding for potential use when they get hit later.
Meanwhile, production is haphazared and voluntary. Some companies that already make these supplies are trying to make more; others that *could* produce them are dipping their toes in the water; still others that could make them are not, not sure whether it's worth the investment.
This is how it should work now: the president announces that from now until the end of the crisis, the US government is the buyer of all essential medical supplies–masks, gowns, gloves, ventilators, respirators, etc.
It then coordinates with every state to determine what their needs are–how much hospital bed capacity they currently have, what supplies on hand, what their needs would be given various scenarios of hospitalization based on the demographics of their population.
It should then turn to manufacturers and ask what raw materials and production equipment would be needed to produce the needed quantities.
Next, it would try to match the demand with the supply, determining which, if any, inputs were in short supply, prioritizing according to need. It would then allocate the inputs to manufacturers, providing contracts and financial inducements to get companies to participate.
Recalcitrant companies could conceivably forced, but there's probably no need. There is plenty of reason companies would want in on these contracts and plenty of profit to be made.
Then the federal government buys up all the key supplies, and allocates them according to need. The states and cities hit hardest now get priority, then locations likely to be hit next, and so on.
When the crisis is over, the government steps away. These contracts and terms can be written in such a way that it's worth the capital investment of the participating companies.
This is not nationalization. It's not socialism. It's a system the US federal government has long-used in emergencies to ensure critical goods get produced and sent to where they are needed.
I've seen plenty of speculation as to why Trump refuses to do this: he doesn't want to be on the hook for the consequences, he wants to be able to blame governors, pressure from self-interested companies & the US Chamber of Commerce, a sadistic desire to see governors grovel–
Maybe just a naive faith in the magic of the market. I have no idea.
But this is a power he has to invoke. It's been done before. It will save lives. Not doing it is a recipe for further calamity.
But this is a power he has to invoke. It's been done before. It will save lives. Not doing it is a recipe for further calamity.
