The president has been criticized for not forcing companies via the act to increase the manufacture of more products like ventilators, test kits, gowns, masks and other PPE.
Also, they claim that this will prevent prices for these products from rising and that the government will be able to coordinate the distribution based on need.
The president in his defense has indicated that except in a few cases, he didn’t need to invoke the Defense Production Act and that companies have voluntarily stepped up to the plate to provide these Items. He also indicated that it’s up to the states to acquire these items.
Here are several reasons why he is absolutely correct and his critics are wrong.
1. The COVID-19 crisis caused a tremendous increase in demand for these products. A U.S. company that produces the above necessary products did not have to spend a penny to generate the demand and incur any sales or advertising costs to do so.
They can simply continue to produce these products at current levels and/or ramp-up more production if they can. They’d sell every single one of them thereby generating more profit. Why would a for-profit company in these businesses not want to do so?
It’s found profit for them. The president, being a businessman knows that hitting them over the head will not produce any better results. And, the companies will reap additional goodwill and future PR and advertising benefit by volunteering and by stepping up.
2. By continuing and ramping up production, these companies keep their employees employed, probably will need to pay them overtime and might have to increase employment to meet the demand. Everyone benefits.
3. After the crisis passes, the critical equipment and supplies will need to be produced to replenish and dramatically increase inventories for future events. Again, these companies and the country benefits.
4. Let’s say a company is not in the ventilator business, for example, GM, and the president mandated that they produce ventilators. They would have to either start from scratch or partner with a company that did to start production.
Employees would probably have to be trained, equipment procured, manufactured, delivered, installed, tested and approvals by regulating agencies given before these products are distributed to health care facilities- it takes time to do this. This is at best a long-term solution that would not benefit the folks currently in need of the products.
5. The DOJ has and will use its authority to prevent and prosecute price gouging and overcharging. If Cuomo’s claim that the price of face masks has gone up from .80 to $7, let him go to the DOJ and seek relief.
Cuomo loves to cry wolf and blame everyone other than himself when it doesn’t go his way.
6. The president could not force companies outside of the U.S. to produce more items for consumption within the U.S. nor control their prices via the Defense Production Act. They could charge any price they want. Take it or leave it.
7. The government would be forced to dole out supplies to each state based on need. I’m sure each governor would be satisfied with their portion, right?
It’s easy for Biden, Sanders Pelosi, Schumer, Cuomo and the media to criticize President Trump. They’ve never held real jobs in their lives.
If the President had fully invoked the Defense Production Act thereby forcing companies to comply and have the government decide who gets what and how many, he’d be called Hitler or worse by these people. We all know this to be true.
Isn’t hindsight great!