Coronavirus Is Exposing the Economic Ignorance of the Left

(AP Photo/Matt Rourke)

Maureen May, a nurse writing in The Philadelphia Inquirer, said:

The federal government has the ability to launch the mass manufacture of equipment for the fight against COVID-19 through the Defense Production Act. On the state level, we urge Gov. Tom Wolf to take all actions to retrofit manufacturing facilities in Pennsylvania.

The shortage of some medical supplies to deal with the COVID-19 problem has developed into something of a liberal meme: why don’t our government leaders do something about this?

Well, the federal government does not have the ability to launch the mass manufacture of equipment if there are no idle production lines which can be started up, and with the orders for things pouring in, American manufacturers of the necessary supplies have already moved to full capacity production. That didn’t require an order from President Trump; market forces pushed that. If President Trump used the Defense Production Act to order more, he might, with massive government investment to build it, get private industry to build the facilities necessary, but such would almost surely never be ready until after the crisis has ended.

The author urged Governor Tom Wolf (D-PA) “to take all actions to retrofit manufacturing facilities,” and with that, she possibly recognized that the production lines for greater production did not currently exist. There are shuttered production facilities all across the Keystone State, but turning decades-abandoned steel mills into facilities for the production of medical equipment would take years. Roofs have to be fixed, building interiors exposed to the weather will take months of clean-up to be fit for the manufacture of medical equipment, architects and engineers will have to design the production facilities, construction crews and equipment suppliers will have to build to plans and install equipment, road and rail lines will have to be repaired, heating and air conditioning will have to be installed, plumbing and electrical work will have to be done, and everything inspected throughout the course of the ‘retrofitting’ process, with everything up to snuff on OSHA regulations, the sanitary requirements of medical equipment production, and workers will have to be hired and trained. This isn’t like walking into a room and turning on the light switch.

But, let’s assume that President Trump does invoke the DPA, and a few new factories are built to produce medical gloves and masks and respirators. By the time they’re built, the crisis will almost surely be over, but the additional production capacity will now be there. So much of our medical supplies are currently produced overseas, primarily in Mexico and China, because it’s cheaper to make them there. CNBC reported that, in 2017, the average hourly wage for factory workers in the People’s Republic was a whopping $3.60 per hour. That was a steep rise, and more than five times the hourly wage for factory workers in India.

Once the medical equipment situation stabilizes, that new industrial capacity in the United States is going to find itself competing with factories in Sri Lanka, where the average factory worker makes 50¢ an hour. A lot of people complained when President Trump raised some tariffs to help American manufacturing, but steep tariffs on medical supplies would be needed to keep those new American production lines working. And that, of course, means that health care costs will rise again.

Maureen May is a nurse, and I shall assume a good one. Regrettably, she doesn’t seem to know very much about production, manufacturing or economics, and the editors of The Philadelphia Inquirer, who should have at least some idea about production costs, given that the paper has been through two bankruptcy auctions in recent years, chose not to correct her.
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