The Trump administration, like the preceding Biden administration, is making liberal use of a little-known Cold War law called the “Defense Production Act” (DPA). Utilization principally goes like this: The administration identifies some sort of production deficiency (e.g., minerals, solar panels, heat pumps) and then invokes the DPA, declaring it an issue of national defense in order to accelerate production. This process may seem simple, but its repeated use in recent years sows seeds for future problems. In many ways, the DPA is just a Band-Aid—it doesn’t actually address the fundamental causes of the scarcity it seeks to remedy.

Signed into law in 1950, the DPA was intended to address the market failure in which private enterprise does not provide for the common defense. This lesson was learned some years earlier during World War II, when—although the United States eventually became an industrial powerhouse churning out weapons—it took time and several laws to shift manufacturers to the more pressing (albeit less profitable) tanks, aircraft, and other materiel needed. The DPA somewhat preserves this WWII-era authority, ensuring that if the country finds itself in another major conflict, it will no longer take years to direct the nation’s industry toward war efforts.

Read more from the R Street Institute here.

The views and opinions expressed are those of the author’s and do not necessarily reflect the official policy or position of C3.