The path to jobs and renewed prosperity is to encourage more manufacturing in the U.S. by replacing the Corporate Income Tax with a VAT that would place a matching burden on imports and be subtracted from exports. In addition a provision should be created for patent protection that requires 80% domestic content in exchange.
In 1791, Hamilton presented a major paper that made the case for federal leadership (industrial policy) to create jobs. The principle met with opposition on the age-old diversion in opinion on the purpose and reach of the federal government, and was defeated by the Congress, but President Washington joined in pushing for American manufacture.
“At a time when the country was overwhelmingly agricultural, Hamilton devised a visionary blueprint of ways that the federal government, through selective bounties and import duties, could galvanize manufacturing. He and Washington recalled how reliance on foreign manufactures had crippled America in wartime; the report was driven partly by the desire for strategic self-sufficiency…
..Far from being Hamilton’s willing dupe, Washington understood his programs thoroughly. Though he knew America would remain agricultural, he wanted to augment its manufacturing capacity. Starting with his inauguration, he had delighted in wearing clothes of American manufacture to stimulate the textile industry. At Mount Vernon he refused to drink porter or eat cheese that was not produced in America. In his discarded first inaugural address, he had endorsed government action to open canals, improve roads, and stimulate internal improvements.”
- “Washington, A Life,” Ron Chernow, The Penguin Group, New York 2010, p. 672